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Theory and History 

An Interpretation of Social and 
Economic Evolution 


Preface by Murray N. Rothbard 

von Mises 


All rights reserved. Written permission must be secured from 
the publisher to use or reproduce any part of this book, except 
for brief quotations in critical reviews or articles. 

Copyright © 1957 by Yale University Press 
Reprinted in 1969 by Arlington House 
Copyright © 1985 by Margit von Mises 
Reprint in 2007 by the Ludwig von Mises Institute 

Ludwig von Mises Institute, 518 West Magnolia Avenue, 
Auburn, Alabama 36832 U.S.A.; 

ISBN: 978-1-933550-19-0 


Preface by Murray N. Rothbard xi 


1. Methodological Dualism 1 

2. Economics and Metaphysics 3 

3. Regularity and Prediction 4 

4. The Concept of the Laws of Nature 5 

5. The Limitations of Human Knowledge 8 

6. Regularity and Choosing 9 

7. Means and Ends 12 

Part One 

Chapter 1. Judgments of Value 

1. Judgments of Value and Propositions of Existence ... .19 

2. Valuation and Action 20 

3. The Subjectivity of Valuation 22 

4. The Logical and Syntactical Structure 

of Judgments of Value 23 

Chapter 2. Knowledge and Value 

1. The Bias Doctrine 26 

2. Common Weal versus Special Interests 28 

3. Economics and Value 32 

4. Bias and Intolerance 34 

Chapter 3. The Quest for Absolute Values 

1. The Issue 35 

2. Conflicts with Society 37 


3. A Remark on the Alleged Medieval Unanimity 42 

4. The Idea of Natural Law 44 

5. Revelation 49 

6. Atheistic Intuition 50 

7. The Idea of Justice 51 

8. The Utilitarian Doctrine Restated 55 

9. On Aesthetic Values 61 

10. The Historical Significance of the Quest for 

Absolute Values 63 

Chapter 4. The Negation of Valuation 

Part Two 
Determinism and Materialism 

Chapter 5. Determinism and Its Critics 

1. Determinism 73 

2. The Negation of Ideological Factors 75 

3. The Free-Will Controversy 76 

4. Foreordination and Fatalism 78 

5. Determinism and Penology 82 

6. Determinism and Statistics 84 

7. The Autonomy of the Sciences of Human Action 92 

Chapter 6. Materialism 

1. Two Varieties of Materialism 94 

2. The Secretion Analogy 97 

3. The Political Implications of Materialism 99 

Chapter 7. Dialectical Materialism 

1. Dialectics and Marxism 102 

2. The Material Productive Forces 106 


3. The Class Struggle 112 

4. The Ideological Impregnation of Thought 122 

5. The Conflict of Ideologies 130 

6. Ideas and Interests 133 

7. The Class Interests of the Bourgeoisie 142 

8. The Critics of Marxism 147 

9. Marxian Materialism and Socialism 155 

Chapter 8. Philosophy of History 

1. The Theme of History 159 

2. The Theme of the Philosophy of History 162 

3. The Difference between the Point of View of History 

and That of Philosophy of History 166 

4. Philosophy of History and the Idea of God 171 

5. Activistic Determinism and Fatalistic Determinism . . .177 

Part Three 
Epistemological Problems of History 

Chapter 9. The Concept of Historical Individuality 

1. The Ultimate Given of History 183 

2. The Role of the Individual in History 184 

3. The Chimera of the Group Mind 188 

4. Planning History 195 

Chapter 10. Historicism 

1. The Meaning of Historicism 198 

2. The Rejection of Economics 205 

3. The Quest for Laws of Historical Change 210 

4. Historicist Relativism 214 

5. Dissolving History 219 


6. Undoing History 227 

7. Undoing Economic History 234 

Chapter 11. The Challenge of Scientism 

1. Positivism and Behaviorism 240 

2. The Collectivist Dogma 250 

3. The Concept of the Social Sciences 256 

4. The Nature of Mass Phenomena 259 

Chapter 12. Psychology and Thymology 

1. Naturalistic Psychology and Thymology 264 

2. Thymology and Praxeology 271 

3. Thymology as a Historical Discipline 272 

4. History and Fiction 274 

5. Rationalization 280 

6. Introspection 283 

Chapter 13. Meaning and Use of the Study of History 

1. The Why of History 285 

2. The Historical Situation 286 

3. History of the Remote Past 289 

4. Falsifying History 291 

5. History and Humanism 293 

6. History and the Rise of Aggressive Nationalism 296 

7. History and Judgments of Value 298 

Chapter 14. The Epistemological Features of History 

1. Prediction in the Natural Sciences 303 

2. History and Prediction 305 

3. The Specific Understanding of History 309 

4. Thymological Experience 312 

5. Real Types and Ideal Types 315 


Part Four 
The Course of History 

Chapter 15. Philosophical Interpretations of History 

1. Philosophies of History and Philosophical 
Interpretations of History 323 

2. Environmentalism 324 

3. The Egalitarians' Interpretation of History 326 

4. The Racial Interpretation of History 332 

5. The Secularism of Western Civilization 337 

6. The Rejection of Capitalism by Antisecularism 340 

Chapter 16. Present-Day Trends and the Future 

1. The Reversal of the Trend toward Freedom 347 

2. The Rise of the Ideology of Equality 

in Wealth and Income 351 

3. The Chimera of a Perfect State of Mankind 362 

4. The Alleged Unbroken Trend toward Progress 367 

5. The Suppression of "Economic" Freedom 370 

6. The Uncertainty of the Future 378 

Index 381 


Ludwig von Mises published many books and articles 
in his long and productive life, each of them making 
important contributions to the theory and application 
of economic science. But there stands out among them 
four towering masterpieces, immortal monuments to 
the work of the greatest economist and scientist of 
human action of our century. The first, which estab- 
lished Mises in the front rank of economists, was The 
Theory of Money and Credit (1912), which for the first 
time integrated the theory of money and the theory of 
relative prices, and outlined his later theory of the 
business cycle. Mises's second great work was Social- 
ism (1922), which provided the definitive, comprehen- 
sive critique of socialism and demonstrated that a 
socialist order could not calculate economically. The 
third was his stupendous treatise Human Action 
(1949), which set forth an entire structure of econom- 
ics and analysis of acting man. All three of these works 
have made their mark in economics, and have been 
featured in the "Austrian" revival that has flowered in 
the United States over the past decade. 


But Mises's fourth and last great work, Theory and 
History (1957), has made remarkably little impact, 
and has rarely been cited even by the young econo- 
mists of the recent Austrian revival. It remains by far 
the most neglected masterwork of Mises. And yet it 
provides the philosophical backstop and elaboration of 
the philosophy underlying Human Action. It is Mises's 
great methodological work, explaining the basis of his 
approach to economics, and providing scintillating cri- 
tiques of such fallacious alternatives as historicism, 
scientism, and Marxian dialectical materialism. 

It might be thought that, despite its great impor- 
tance, Theory and History has not made its mark 
because, in this age of blind academic specialization, 
economics will have nothing to do with anything that 
smacks of the philosophic. Certainly, hyper-specializa- 
tion plays a part, but in the last few years, interest in 
methodology and the basic underpinnings of econom- 
ics has blossomed, and one would think that at least 
the specialists in this area would find much to discuss 
and absorb in this book. And economists are surely not 
so far gone in jargon and muddled writing that they 
would fail to respond to Mises's lucid and sparkling 

It is likely, instead, that the neglect of Theory and 
History has more to do with the content of its philo- 
sophical message. For while many people are aware of 
the long and lone struggle that Ludwig von Mises 
waged against statism and on behalf of laissez-faire, 
few realize that there is far greater resistance in the 
economics profession to Mises's methodology than 


there is to his politics. Adherence to the free market, 
after all, is now not uncommon among economists 
(albeit not with Mises's unerring consistency), but few 
are ready to adopt the characteristically Austrian 
method which Mises systematized and named "praxe- 

At the heart of Mises and praxeology is the concept 
with which he appropriately begins Theory and His- 
tory, methodological dualism, the crucial insight that 
human beings must be considered and analyzed in a 
way and with a methodology that differs radically from 
the analysis of stones, planets, atoms, or molecules. 
Why? Because, quite simply, it is the essence of human 
beings that they act, that they have goals and purposes, 
and that they try to achieve those goals. Stones, atoms, 
planets, have no goals or preferences; hence, they do 
not choose among alternative courses of action. Atoms 
and planets move, or are moved; they cannot choose, 
select paths of action, or change their minds. Men and 
women can and do. Therefore, atoms and stones can be 
investigated, their courses charted, and their paths 
plotted and predicted, at least in principle, to the 
minutest quantitative detail. People cannot; every day, 
people learn, adopt new values and goals, and change 
their minds; people cannot be slotted and predicted as 
can objects without minds or without the capacity to 
learn and choose. 

And now we can see why the economics profession 
has put up such massive resistance to the basic 
approach of Ludwig von Mises. For economics, like the 
other social sciences in our century, has embraced the 


myth of what Mises has properly and scornfully 
referred to as "scientism" — the idea that the only truly 
"scientific" approach to the study of man is to ape the 
approach of the physical sciences, in particular of its 
most prestigious branch, physics. To become truly 
"scientific" like physics and the other natural sciences, 
then, economics must shun such concepts as purposes, 
goals and learning; it must abandon man's mind and 
write only of mere events. It must not talk of changing 
one's mind, because it must claim that events are pre- 
dictable, since, in the words of the original motto of 
the Econometric Society, "Science is prediction." And 
to become a "hard" or "real" science, economics must 
treat individuals not as unique creatures, each with 
his or her own goals and choices, but as homogenous 
and therefore predictable bits of "data." One reason 
orthodox economic theory has always had great diffi- 
culty with the crucial concept of the entrepreneur is 
that each entrepreneur is clearly and obviously 
unique; and neoclassical economics cannot handle 
individual uniqueness. 

Furthermore, "real" science, it is alleged, must oper- 
ate on some variant of positivism. Thus, in physics, the 
scientist is confronted with a number of homogeneous, 
uniform bits of events, which can be investigated for 
quantitative regularities and constants, e.g., the rate at 
which objects fall to earth. Then, the scientist frames 
hypotheses to explain classes of behavior or motions, 
and then deduces various propositions by which he can 
"test" the theory by checking with hard, empirical 
fact, with these observable bits of events. (Thus, the 


theory of relativity can be tested by checking certain 
empirically observable features of an eclipse.) In the 
Old Positivist variant, he "verifies" the theory by this 
empirical check; in the more nihilistic neopositivism 
of Karl Popper, he can only "falsify" or "not falsify" a 
theory in this manner. In any case, his theories must 
always be held tentatively, and can never, at least not 
officially, be embraced as definitively true; for he may 
always find that other, alternative theories may be 
able to explain wider classes of facts, that some new 
facts may run counter to, or falsify, the theory. The sci- 
entist must always wear at least the mask of humility 
and open-mindedness. 

But it was part of the genius of Ludwig von Mises 
to see that sound economics has never proceeded in 
this way, and to elaborate the good reasons for this 
curious fact. There has been much unnecessary confu- 
sion over Mises 's rather idiosyncratic use of the term 
a priori, and the enthusiasts for modern scientific 
methods have been able to use it to dismiss him as a 
mere unscientific mystic. Mises saw that students of 
human action are at once in better and in worse, and 
certainly in different, shape from students of natural 
science. The physical scientist looks at homogenous 
bits of events, and gropes his way toward finding and 
testing explanatory or causal theories for those empir- 
ical events. But in human history, we, as human 
beings ourselves, are in a position to know the cause of 
events already; namely, the primordial fact that 
human beings have goals and purposes and act to 


attain them. And this fact is known not tentatively 
and hesitantly, but absolutely and apodictically. 

One example that Mises liked to use in his class to 
demonstrate the difference between two fundamental 
ways of approaching human behavior was in looking at 
Grand Central Station behavior during rush hour. The 
"objective" or "truly scientific" behaviorist, he pointed 
out, would observe the empirical events: e.g., people 
rushing back and forth, aimlessly at certain predictable 
times of day. And that is all he would know. But the 
true student of human action would start from the fact 
that all human behavior is purposive, and he would see 
the purpose is to get from home to the train to work in 
the morning, the opposite at night, etc. It is obvious 
which one would discover and know more about human 
behavior, and therefore which one would be the gen- 
uine "scientist." 

It is from this axiom, the fact of purposive human 
action, that all of economic theory is deduced; eco- 
nomics explores the logical implications of the perva- 
sive fact of action. And since we know absolutely that 
human action is purposive, we know with equal cer- 
tainty the conclusions at each step of the logical chain. 
There is no need to "test" this theory, if indeed that 
concept has much sense in this context. 

Is the fact of human purposive action "verifiable"? 
Is it "empirical"? Yes, but certainly not in the precise, 
or quantitative way that the imitators of physics are 
used to. The empiricism is broad and qualitative, 
stemming from the essence of human experience; it 


has nothing to do with statistics or historical events. 
Furthermore, it is dependent on the fact that we are 
all human beings and can therefore use this knowledge 
to apply it to others of the same species. Still less is the 
axiom of purposive action "falsifiable." It is so evident, 
once mentioned and considered, that it clearly forms 
the very marrow of our experience in the world. 

It is just as well that economic theory does not need 
"testing," for it is impossible to test it in any way by 
checking its propositions against homogeneous bits of 
uniform events. For there are no such events. The use 
of statistics and quantitative data may try to mask this 
fact, but their seeming precision is only grounded on 
historical events that are not homogeneous in any 
sense. Each historical event is a complex, unique 
resultant of many causal factors. Since it is unique, it 
cannot be used for a positivistic test, and since it is 
unique it cannot be combined with other events in the 
form of statistical correlations and achieve any mean- 
ingful result. In analyzing the business cycle, for 
example, it is not legitimate to treat each cycle as 
strictly homogeneous to every other, and therefore to 
add, multiply, manipulate, and correlate data. To aver- 
age two time series, for example, and to proudly pro- 
claim that Series X has an average four-month lead 
compared to Series Y at some phase of the cycle, means 
next to nothing. For (a) no particular time series may 
even have the four-month lead-lag, and the lags may 
and will range widely; and (b) the average of any past 
series has no relevance to the data of the future, which 

xviii PREFACE 

will have its own ultimately unpredictable differences 
from the previous cycles. 

By demolishing the attempted use of statistics to 
frame or test theory, Ludwig von Mises has been 
accused of being a pure theorist with no interest in or 
respect for history. On the contrary, and this is the cen- 
tral theme of Theory and History, it is the positivists 
and behaviorists who lack respect for the unique his- 
torical fact by trying to compress these complex his- 
torical events into the Procrustean mold of move- 
ments of atoms or planets. In human affairs, the com- 
plex historical event itself needs to be explained by 
various theories as far as possible; but it can never be 
completely or precisely determined by any theory. The 
embarrassing fact that the forecasts of would-be eco- 
nomic sooth-sayers have always faced an abysmal 
record, especially the ones that pretend to quantitative 
precision, is met in mainstream economics by the 
determination to fine-tune the model once more and 
try again. It is above all Ludwig von Mises who recog- 
nizes the freedom, of mind and of choice, at the irre- 
ducible heart of the human condition, and who realizes 
therefore that the scientific urge to determinism and 
complete predictability is a search for the impossible — 
and is therefore profoundly unscientific. 

Among some younger Austrians, an unwillingness 
to challenge the prevailing methodological orthodoxy 
has led to either the outright adoption of positivism or 
else the abandonment of theory altogether on behalf of 


a vaguely empirical institutionalism. Immersion in 
Theory and History would help both groups to realize 
that true theory is not divorced from the world of real, 
acting man, and that one can abandon scientistic 
myths while still using the apparatus of deductive the- 

Austrian economics will never enjoy a genuine ren- 
aissance until economists read and absorb the vital les- 
sons of this unfortunately neglected work. Without 
praxeology no economics can be truly Austrian or truly 

Murray N. Rothbard 
New York City, 1985 


1. Methodological Dualism 

Mortal man does not know how the universe and all 
that it contains may appear to a superhuman intelli- 
gence. Perhaps such an exalted mind is in a position to 
elaborate a coherent and comprehensive monistic inter- 
pretation of all phenomena. Man — up to now, at least 
— has always gone lamentably amiss in his attempts to 
bridge the gulf that he sees yawning between mind and 
matter, between the rider and the horse, between the 
mason and the stone. It would be preposterous to view 
this failure as a sufficient demonstration of the sound- 
ness of a dualistic philosophy. All that we can infer 
from it is that science — at least for the time being — 
must adopt a dualistic approach, less as a philosophical 
explanation than as a methodological device. 

Methodological dualism refrains from any proposi- 
tion concerning essences and metaphysical constructs. 
It merely takes into account the fact that we do not 
know how external events — physical, chemical, and 
physiological — affect human thoughts, ideas, and judg- 
ments of value. This ignorance splits the realm of 
knowledge into two separate fields, the realm of exter- 
nal events, commonly called nature, and the realm of 
human thought and action. 

Older ages looked upon the issue from a moral or 


religious point of view. Materialist monism was rejected 
as incompatible with the Christian dualism of the Cre- 
ator and the creation, and of the immortal soul and the 
mortal body. Determinism was rejected as incompatible 
with the fundamental principles of morality as well as 
with the penal code. Most of what was advanced in 
these controversies to support the respective dogmas 
was unessential and is irrelevant from the methodologi- 
cal point of view of our day. The determinists did little 
more than repeat their thesis again and again, without 
trying to substantiate it. The indeterminists denied their 
adversaries' statements but were unable to strike at their 
weak points. The long debates were not very helpful. 
The scope of the controversy changed when the new 
science of economics entered the scene. Political parties 
which passionately rejected all the practical conclu- 
sions to which the results of economic thought inevita- 
bly lead, but were unable to raise any tenable objec- 
tions against their truth and correctness, shifted the 
argument to the fields of epistemology and method- 
ology. They proclaimed the experimental methods of 
the natural sciences to be the only adequate mode of 
research, and induction from sensory experience the 
only legitimate mode of scientific reasoning. They be- 
haved as if they had never heard about the logical 
problems involved in induction. Everything that was 
neither experimentation nor induction was in their eyes 
metaphysics, a term that they employed as synony- 
mous with nonsense. 


2. Economics and Metaphysics 

The sciences of human action start from the fact that 
man purposefully aims at ends he has chosen. It is 
precisely this that all brands of positivism, behaviorism, 
and panphysicalism want either to deny altogether or 
to pass over in silence. Now, it would simply be silly 
to deny the fact that man manifestly behaves as if he 
were really aiming at definite ends. Thus the denial of 
purposefulness in man's attitudes can be sustained 
only if one assumes that the choosing both of ends and 
of means is merely apparent and that human behavior 
is ultimately determined by physiological events which 
can be fully described in the terminology of physics 
and chemistry. 

Even the most fanatical champions of the "Unified 
Science" sect shrink from unambiguously espousing this 
blunt formulation of their fundamental thesis. There 
are good reasons for this reticence. So long as no defi- 
nite relation is discovered between ideas and physical 
or chemical events of which they would occur as the 
regular sequel, the positivist thesis remains an epistemo- 
logical postulate derived not from scientifically estab- 
lished experience but from a metaphysical world view. 

The positivists tell us that one day a new scientific 
discipline will emerge which will make good their 
promises and will describe in every detail the physical 
and chemical processes that produce in the body of 
man definite ideas. Let us not quarrel today about such 
issues of the future. But it is evident that such a meta- 


physical proposition can in no way invalidate the re- 
sults of the discursive reasoning of the sciences of hu- 
man action. The positivists for emotional reasons do 
not like the conclusions that acting man must neces- 
sarily draw from the teachings of economics. As they 
are not in a position to find any flaw either in the rea- 
soning of economics or in the inferences derived from 
it, they resort to metaphysical schemes in order to dis- 
credit the epistemological foundations and the method- 
ological approach of economics. 

There is nothing vicious about metaphysics. Man 
cannot do without it. The positivists are lamentably 
wrong in employing the term "metaphysics" as a 
synonym for nonsense. But no metaphysical proposition 
must contradict any of the findings of discursive rea- 
soning. Metaphysics is not science, and the appeal to 
metaphysical notions is vain in the context of a logical 
examination of scientific problems. This is true also of 
the metaphysics of positivism, to which its supporters 
have given the name of antimetaphysics. 

3. Regularity and Prediction 

Epistemologically the distinctive mark of what we 
call nature is to be seen in the ascertainable and inevita- 
ble regularity in the concatenation and sequence of phe- 
nomena. On the other hand the distinctive mark of 
what we call the human sphere or history or, better, 
the realm of human action is the absence of such a 
universally prevailing regularity. Under identical con- 
ditions stones always react to the same stimuli in the 


same way; we can learn something about these regular 
patterns of reacting, and we can make use of this knowl- 
edge in directing our actions toward definite goals. Our 
classification of natural objects and our assigning names 
to these classes is an outcome of this cognition. A 
stone is a thing that reacts in a definite way. Men re- 
act to the same stimuli in different ways, and the same 
man at different instants of time may react in ways 
different from his previous or later conduct. It is im- 
possible to group men into classes whose members al- 
ways react in the same way. 

This is not to say that future human actions are 
totally unpredictable. They can, in a certain way, be 
anticipated to some extent. But the methods applied 
in such anticipations, and their scope, are logically and 
epistemologically entirely different from those applied 
in anticipating natural events, and from their scope. 

4. The Concept of the Laws of Nature 

Experience is always experience of past happenings. 
It refers to what has been and is no longer, to events 
sunk forever in the flux of time. 

The awareness of regularity in the concatenation and 
sequence of many phenomena does not affect this ref- 
erence of experience to something that occurred once 
in the past at a definite place and time under the cir- 
cumstances prevailing there and then. The cognition 
of regularity too refers exclusively to past events. The 
most experience can teach us is: in all cases observed 
in the past there was an ascertainable regularity. 


From time immemorial all men of all races and civili- 
zations have taken it for granted that the regularity ob- 
served in the past will also prevail in the future. The 
category of causality and the idea that natural events 
will in the future follow the same pattern they showed 
in the past are fundamental principles of human 
thought as well as of human action. Our material civili- 
zation is the product of conduct guided by them. Any 
doubt concerning their validity within the sphere of 
past human action is dispelled by the results of tech- 
nological designing. History teaches us irrefutably that 
our forefathers and we ourselves up to this very mo- 
ment have acted wisely in adopting them. They are true 
in the sense that pragmatism attaches to the concept of 
truth. They work, or, more precisely, they have worked 
in the past. 

Leaving aside the problem of causality with its meta- 
physical implications, we have to realize that the nat- 
ural sciences are based entirely on the assumption that 
a regular conjunction of phenomena prevails in the 
realm they investigate. They do not search merely for 
frequent conjunction but for a regularity that prevailed 
without exception in all cases observed in the past and 
is expected to prevail in the same way in all cases to be 
observed in the future. Where they can discover only a 
frequent conjunction — as is often the case in biology, 
for example — they assume that it is solely the inade- 
quacy of our methods of inquiry that prevents us tem- 
porarily from discovering strict regularity. 

The two concepts of invariable and of frequent 
conjunction must not be confused. In referring to in- 


variable conjunction people mean that no deviation 
from the regular pattern — the law — of conjunction has 
ever been observed and that they are certain, as far 
as men can be certain about anything, that no such 
deviation is possible and will ever happen. The best 
elucidation of the idea of inexorable regularity in the 
concatenation of natural phenomena is provided by the 
concept of miracles. A miraculous event is something 
that simply cannot happen in the normal course of 
world affairs as we know it, because its happening could 
not be accounted for by the laws of nature. If none- 
theless the occurrence of such an event is reported, two 
different interpretations are provided, both of which, 
however, fully agree in taking for granted the inexo- 
rability of the laws of nature. The devout say: "This 
could not happen in the normal course of affairs. It 
came to pass only because the Lord has the power to 
act without being restricted by the laws of nature. It is 
an event incomprehensible and inexplicable for the 
human mind, it is a mystery, a miracle." The rationalists 
say: "It could not happen and therefore it did not hap- 
pen. The reporters were either liars or victims of a 
delusion." If the concept of laws of nature were to 
mean not inexorable regularity but merely frequent 
connection, the notion of miracles would never have 
been conceived. One would simply say: A is frequently 
followed by B, but in some instances this effect failed 
to appear. 

Nobody says that stones thrown into the air at an 
angle of 45 degrees will frequently fall down to earth 
or that a human limb lost by an accident frequently 


does not grow again. All our thinking and all our ac- 
tions are guided by the knowledge that in such cases 
we are not faced with frequent repetition of the same 
connection, but with regular repetition. 

5. The Limitations of Human Knowledge 

Human knowledge is conditioned by the power of 
the human mind and by the extent of the sphere in 
which objects evoke human sensations. Perhaps there 
are in the universe things that our senses cannot per- 
ceive and relations that our minds cannot comprehend. 
There may also exist outside of the orbit we call the 
universe other systems of things about which we can- 
not learn anything because, for the time being, no traces 
of their existence penetrate into our sphere in a way 
that can modify our sensations. It may also be that 
the regularity in the conjunction of natural phenomena 
we are observing is not eternal but only passing, that 
it prevails only in the present stage (which may last 
millions of years ) of the history of the universe and may 
one day be replaced by another arrangement. 

Such and similar thoughts may induce in a conscien- 
tious scientist the utmost caution in formulating the 
results of his studies. It behooves the philosopher to be 
still more restrained in dealing with the apriori cate- 
gories of causality and the regularity in the sequence 
of natural phenomena. 

The apriori forms and categories of human thinking 
and reasoning cannot be traced back to something of 
which they would appear as the logically necessary 


conclusion. It is contradictory to expect that logic could 
be of any service in demonstrating the correctness or 
validity of the fundamental logical principles. All that 
can be said about them is that to deny their correctness 
or validity appears to the human mind nonsensical and 
that thinking, guided by them, has led to modes of suc- 
cessful acting. 

Hume's skepticism was the reaction to a postulate 
of absolute certainty that is forever unattainable to 
man. Those divines who saw that nothing but revela- 
tion could provide man with perfect certainty were 
right. Human scientific inquiry cannot proceed beyond 
the limits drawn by the insufficiency of man's senses 
and the narrowness of his mind. There is no deductive 
demonstration possible of the principle of causality and 
of the ampliative inference of imperfect induction; 
there is only recourse to the no less indemonstrable 
statement that there is a strict regularity in the conjunc- 
tion of all natural phenomena. If we were not to refer 
to this uniformity, all the statements of the natural 
sciences would appear to be hasty generalizations. 

6. Regularity and Choosing 

The main fact about human action is that in regard 
to it there is no such regularity in the conjunction of 
phenomena. It is not a shortcoming of the sciences of 
human action that they have not succeeded in discover- 
ing determinate stimulus-response patterns. What does 
not exist cannot be discovered. 

If there were no regularity in nature, it would be 


impossible to assert anything with regard to the be- 
havior of classes of objects. One would have to study 
the individual cases and to combine what one has 
learned about them into a historical account. 

Let us, for the sake of argument, assume that all 
those physical quantities that we call constants are 
in fact continually changing and that the inadequacy 
of our methods of inquiry alone prevents us from be- 
coming aware of these slow changes. We do not take 
account of them because they have no perceptible in- 
fluence upon our conditions and do not noticeably affect 
the outcome of our actions. Therefore one could say 
that these quantities established by the experimental 
natural sciences may fairly be looked upon as constants 
since they remain unchanged during a period of time 
that by far exceeds the ages for which we may plan 
to provide. 

But it is not permissible to argue in an analogous way 
with regard to the quantities we observe in the field of 
human action. These quantities are manifestly variable. 
Changes occurring in them plainly affect the result of 
our actions. Every quantity that we can observe is a 
historical event, a fact which cannot be fully described 
without specifying the time and geographical point. 

The econometrician is unable to disprove this fact, 
which cuts the ground from under his reasoning. He 
cannot help admitting that there are no "behavior con- 
stants." Nonetheless he wants to introduce some num- 
bers, arbitrarily chosen on the basis of a historical fact, 
as "unknown behavior constants." The sole excuse he 
advances is that his hypotheses are "saying only that 


these unknown numbers remain reasonably constant 
through a period of years." 1 Now whether such a 
period of supposed constancy of a definite number is 
still lasting or whether a change in the number has al- 
ready occurred can only be established later on. In 
retrospect it may be possible, although in rare cases 
only, to declare that over a (probably rather short) 
period an approximately stable ratio — which the econo- 
metrician chooses to call a "reasonably" constant ratio 
— prevailed between the numerical values of two fac- 
tors. But this is something fundamentally different from 
the constants of physics. It is the assertion of a historical 
fact, not of a constant that can be resorted to in at- 
tempts to predict future events. 

Leaving aside for the present any reference to the 
problem of the human will or free will, we may say: 
Nonhuman entities react according to regular patterns; 
man chooses. Man chooses first ultimate ends and then 
the means to attain them. These acts of choosing are 
determined by thoughts and ideas about which, at least 
for the time being, the natural sciences do not know 
how to give us any information. 

In the mathematical treatment of physics the dis- 
tinction between constants and variables makes sense; 
it is essential in every instance of technological compu- 
tation. In economics there are no constant relations be- 
tween various magnitudes. Consequently all ascertain- 
able data are variables, or what amounts to the same 

1. See the Cowles Commission for Research in Economics, Report 
for Period, January 1, 1948-June 30, 1949 (University of Chicago), 
p. 7. 


thing, historical data. The mathematical economists 
reiterate that the plight of mathematical economics 
consists in the fact that there are a great number of 
variables. The truth is that there are only variables 
and no constants. It is pointless to talk of variables 
where there are no invariables. 

7. Means and Ends 

To choose is to pick one out of two or more possible 
modes of conduct and to set aside the alternatives. 
Whenever a human being is in a situation in which 
various modes of behavior, precluding one another, are 
open to him, he chooses. Thus life implies an endless 
sequence of acts of choosing. Action is conduct directed 
by choices. 

The mental acts that determine the content of a 
choice refer either to ultimate ends or to the means to 
attain ultimate ends. The former are called judgments 
of value. The latter are technical decisions derived from 
factual propositions. 

In the strict sense of the term, acting man aims only 
at one ultimate end, at the attainment of a state of 
affairs that suits him better than the alternatives. 
Philosophers and economists describe this undeniable 
fact by declaring that man prefers what makes him 
happier to what makes him less happy, that he aims at 
happiness. 1 Happiness — in the purely formal sense in 

1. There is no need to refute anew the arguments advanced for 
more than two thousand years against the principles of eudaemonism, 
hedonism, and utilitarianism. For an exposition of the formal and sub- 


which ethical theory applies the term — is the only 
ultimate end, and all other things and states of affairs 
sought are merely means to the realization of the 
supreme ultimate end. It is customary, however, to 
employ a less precise mode of expression, frequently 
assigning the name of ultimate ends to all those means 
that are fit to produce satisfaction directly and imme- 

The characteristic mark of ultimate ends is that they 
depend entirely on each individual's personal and sub- 
jective judgment, which cannot be examined, measured, 
still less corrected by any other person. Each individual 
is the only and final arbiter in matters concerning his 
own satisfaction and happiness. 

As this fundamental cognition is often considered to 
be incompatible with the Christian doctrine, it may be 
proper to illustrate its truth by examples drawn from 
the early history of the Christian creed. The martyrs 
rejected what others considered supreme delights, in 
order to win salvation and eternal bliss. They did not 
heed their well-meaning fellows who exhorted them 
to save their lives by bowing to the statue of the divine 
emperor, but chose to die for their cause rather than to 
preserve their lives by forfeiting everlasting happiness 
in heaven. What arguments could a man bring for- 

jectivistic character of the concepts "pleasure" and "pain" as em- 
ployed in the context of these doctrines, see Mises, Human Action 
(New Haven, Yale University Press, 1949, pp. 14-15), and Ludwig 
Feuerbach, Eudarnonismus, in Sammtliche Werke, ed. Bolin and Jodl 
(Stuttgart, 1907), 10, 230-93. Of course, those who recognize no 
"happiness" but that given by the orgasm, alcohol, and so forth con- 
tinue to repeat the old errors and distortions. 


ward who wanted to dissuade his fellow from martyr- 
dom? He could try to undermine the spiritual founda- 
tions of his faith in the message of the Gospels and their 
interpretation by the Church. This would have been an 
attempt to shake the Christian's confidence in the ef- 
ficacy of his religion as a means to attain salvation and 
bliss. If this failed, further argument could avail noth- 
ing, for what remained was the decision between two 
ultimate ends, the choice between eternal bliss and 
eternal damnation. Then martyrdom appeared the 
means to attain an end which in the martyr's opinion 
warranted supreme and everlasting happiness. 

As soon as people venture to question and to examine 
an end, they no longer look upon it as an end but 
deal with it as a means to attain a still higher end. The 
ultimate end is beyond any rational examination. All 
other ends are but provisional. They turn into means 
as soon as they are weighed against other ends or 

Means are judged and appreciated according to 
their ability to produce definite effects. While judg- 
ments of value are personal, subjective, and final, judg- 
ments about means are essentially inferences drawn 
from factual propositions concerning the power of the 
means in question to produce definite effects. About 
the power of a means to produce a definite effect there 
can be dissension and dispute between men. For the 
evaluation of ultimate ends there is no interpersonal 
standard available. 

Choosing means is a technical problem, as it were, 


the term "technique" being taken in its broadest sense. 
Choosing ultimate ends is a personal, subjective, indi- 
vidual affair. Choosing means is a matter of reason, 
choosing ultimate ends a matter of the soul and the will. 


Chapter 1. Judgments of Value 

1. Judgments of Value and Propositions of Existence 

Propositions asserting existence (affirmative existen- 
tial propositions) or nonexistence (negative existential 
propositions) are descriptive. They assert something 
about the state of the whole universe or of parts of the 
universe. With regard to them questions of truth and 
falsity are significant. They must not be confounded 
with judgments of value. 

Judgments of value are voluntaristic. They express 
feelings, tastes, or preferences of the individual who 
utters them. With regard to them there cannot be any 
question of truth and falsity. They are ultimate and not 
subject to any proof or evidence. 

Judgments of value are mental acts of the individual 
concerned. As such they must be sharply distinguished 
from the sentences by means of which an individual 
tries to inform other people about the content of his 
judgments of value. A man may have some reason to lie 
about his valuations. We may describe this state of 
affairs in the following way: Every judgment of value 
is in itself also a fact of the actual state of the universe 
and as such may be the topic of existential propositions. 
The sentence "I prefer Beethoven to Lehar" refers to a 
judgment of value. If looked upon as an existential 
proposition, it is true if I really prefer Beethoven and 



act accordingly and false if I in fact prefer Lehar and 
for some reasons lie about my real feelings, taste, or 
preferences. In an analogous way the existential propo- 
sition "Paul prefers Beethoven to Lehar" may be true 
or false. In declaring that with regard to a judgment of 
value there cannot be any question of truth or falsity, 
we refer to the judgment as such and not to the sen- 
tences communicating the content of such a judgment 
of value to other people. 

2. Valuation and Action 

A judgment of value is purely academic if it does not 
impel the man who utters it to any action. There are 
judgments which must remain academic because it is 
beyond the power of the individual to embark upon 
any action directed by them. A man may prefer a starry 
sky to the starless sky, but he cannot attempt to substi- 
tute the former state which he likes better for the latter 
he likes less. 

The significance of value judgments consists pre- 
cisely in the fact that they are the springs of human 
action. Guided by his valuations, man is intent upon 
substituting conditions that please him better for con- 
ditions which he deems less satisfactory. He employs 
means in order to attain ends sought. 

Hence the history of human affairs has to deal with 
the judgments of value that impelled men to act and 
directed their conduct. What happened in history can- 
not be discovered and narrated without referring to 
the various valuations of the aeting individuals. It is 


not the task of the historian qua historian to pass judg- 
ments of value on the individuals whose conduct is the 
theme of his inquiries. As a branch of knowledge his- 
tory utters existential propositions only. But these exis- 
tential propositions often refer to the presence or ab- 
sence of definite judgments of value in the minds of the 
acting individuals. It is one of the tasks of the specific 
understanding of the historical sciences to establish 
what content the value judgments of the acting indi- 
viduals had. 

It is a task of history, for example, to trace back the 
origin of India's caste system to the values which 
prompted the conduct of the generations who devel- 
oped, perfected, and preserved it. It is its further task 
to discover what the consequences of this system were 
and how these effects influenced the value judgments of 
later generations. But it is not the business of the his- 
torian to pass judgments of value on the system as such, 
to praise or to condemn it. He has to deal with its rele- 
vance for the course of affairs, he has to compare it 
with the designs and intentions of its authors and sup- 
porters and to depict its effects and consequences. He 
has to ask whether or not the means employed were fit 
to attain the ends the acting individuals sought. 

It is a fact that hardly any historian has fully avoided 
passing judgments of value. But such judgments are 
always merely incidental to the genuine tasks of history. 
In uttering them the author speaks as an individual 
judging from the point of view of his personal valua- 
tions, not as a historian. 


3. The Subjectivity of Valuation 

All judgments of value are personal and subjective. 
There are no judgments of value other than those as- 
serting I prefer, I like better, I wish. 

It cannot be denied by anybody that various individ- 
uals disagree widely with regard to their feelings, 
tastes, and preferences and that even the same indi- 
viduals at various instants of their lives value the same 
things in a different way. In view of this fact it is use- 
less to talk about absolute and eternal values. 

This does not mean that every individual draws his 
valuations from his own mind. The immense majority 
of people take their valuations from the social environ- 
ment into which they were born, in which they grew 
up, that moulded their personality and educated them. 
Few men have the power to deviate from the traditional 
set of values and to establish their own scale of what 
appears to be better and what appears to be worse. 

What the theorem of the subjectivity of valuation 
means is that there is no standard available which 
would enable us to reject any ultimate judgment of 
value as wrong, false, or erroneous in the way we can 
reject an existential proposition as manifestly false. It 
is vain to argue about ultimate judgments of value as 
we argue about the truth or falsity of an existential 
proposition. As soon as we start to refute by arguments 
an ultimate judgment of value, we look upon it as a 
means to attain definite ends. But then we merely shift 
the discussion to another plane. We no longer view the 


principle concerned as an ultimate value but as a means 
to attain an ultimate value, and we are again faced with 
the same problem. We may, for instance, try to show a 
Buddhist that to act in conformity with the teachings 
of his creed results in effects which we consider disas- 
trous. But we are silenced if he replies that these effects 
are in his opinion lesser evils or no evils at all compared 
to what would result from nonobservance of his rules 
of conduct. His ideas about the supreme good, happi- 
ness, and eternal bliss are different from ours. He does 
not care for those values his critics are concerned with, 
and seeks for satisfaction in other things than they do. 

4. The Logical and Syntactical Structure of 
Judgments of Value 

A judgment of value looks upon things from the 
point of view of the man who utters it. It does not as- 
sert anything about things as they are. It manifests a 
man's affective response to definite conditions of the 
universe as compared with other definite conditions. 

Value is not intrinsic. It is not in things and condi- 
tions but in the valuing subject. It is impossible to 
ascribe value to one thing or state of affairs only. Val- 
uation invariably compares one thing or condition with 
another thing or condition. It grades various states of 
the external world. It contrasts one thing or state, 
whether real or imagined, with another thing or state, 
whether real or imagined, and arranges both in a scale 
of what the author of the judgment likes better and 
what less. 


It may happen that the judging individual considers 
both things or conditions envisaged as equal. He is not 
concerned whether there is A or B. Then his judgment 
of value expresses indifference. No action can result 
from such a neutral disposition. 

Sometimes the utterance of a judgment of value is 
elliptical and makes sense only if appropriately com- 
pleted by the hearer. "I don't like measles" means "I 
prefer the absence of measles to its presence." Such 
incompleteness is the mark of all references to freedom. 
Freedom invariably means freedom from (absence of) 
something referred to expressly or implicitly. The gram- 
matical form of such judgments may be qualified as 
negative. But it is vain to deduce from this idiomatic 
attire of a class of judgments of value any statements 
about their content and to blame them for an alleged 
negativism. Every judgment of value allows of a formu- 
lation in which the more highly valued thing or state 
is logically expressed in both a positive and a negative 
way, although sometimes a language may not have de- 
veloped the appropriate term. Freedom of the press im- 
plies the rejection or negation of censorship. But, stated 
explicitly, it means a state of affairs in which the author 
alone determines the content of his publication as dis- 
tinct from a state in which the police has a right to 
interfere in the matter. 

Action necessarily involves the renunciation of some- 
thing to which a lower value is assigned in order to 
attain or to preserve something to which a higher value 
is assigned. Thus, for instance, a definite amount of lei- 
sure is renounced in order to reap the product of a defi- 


nite amount of labor. The renunciation of leisure is the 
means to attain a more highly valued thing or state. 

There are men whose nerves are so sensitive that they 
cannot endure an unvarnished account of many facts 
about the physiological nature of the human body and 
the praxeological character of human action. Such peo- 
ple take offense at the statement that man must choose 
between the most sublime things, the loftiest human 
ideals, on the one hand, and the wants of his body on 
the other. They feel that such statements detract from 
the nobility of the higher things. They refuse to notice 
the fact that there arise in the life of man situations in 
which he is forced to choose between fidelity to lofty 
ideals and such animal urges as feeding. 

Whenever man is faced with the necessity of choos- 
ing between two things or states, his decision is a 
judgment of value no matter whether or not it is ut- 
tered in the grammatical form commonly employed in 
expressing such judgments. 

Chapter 2. Knowledge and Value 

1. The Bias Doctrine 

The accusation of bias has been leveled against 
economists long before Mane integrated it into his doc- 
trines. Today it is fairly generally endorsed by writers 
and politicians who, although they are in many respects 
influenced by Marxian ideas, cannot simply be consid- 
ered Marxians. We must attach to their reproach a 
meaning that differs from that which it has in the con- 
text of dialectical materialism. We must therefore dis- 
tinguish two varieties of the bias doctrine: the Marxian 
and the non-Marxian. The former will be dealt with in 
later parts of this essay in a critical analysis of Marxian 
materialism. The latter alone is treated in this chapter. 
Upholders of both varieties of the bias doctrine rec- 
ognize that their position would be extremely weak if 
they were merely to blame economics for an alleged 
bias without charging all other branches of science with 
the same fault. Hence they generalize the bias doctrine 
— but this generalized doctrine we need not examine 
here. We may concentrate upon its core, the assertion 
that economics is necessarily not wertfrei but is tainted 
by prepossessions and prejudices rooted in value judg- 
ments. For all arguments advanced to support the doc- 
trine of general bias are also resorted to in the endeav- 
ors to prove the special bias doctrine that refers to 



economics, while some of the arguments brought for- 
ward in favor of the special bias doctrine are manifestly 
inapplicable to the general doctrine. 

Some contemporary defenders of the bias doctrine 
have tried to link it with Freudian ideas. They contend 
that the bias they see in the economists is not conscious 
bias. The writers in question are not aware of their 
prejudgments and do not intentionally seek results that 
will justify their foregone conclusions. From the deep 
recesses of the subconscious, suppressed wishes, un- 
known to the thinkers themselves, exert a disturbing in- 
fluence on their reasoning and direct their cogitations 
toward results that agree with their repressed desires 
and urges. 

However, it does not matter which variety of the bias 
doctrine one endorses. Each of them is open to the same 

For the reference to bias, whether intentional or sub- 
conscious, is out of place if the accuser is not in a posi- 
tion to demonstrate clearly in what the deficiency of 
the doctrine concerned consists. All that counts is 
whether a doctrine is sound or unsound. This is to be 
established by discursive reasoning. It does not in the 
least detract from the soundness and correctness of a 
theory if the psychological forces that prompted its 
author are disclosed. The motives that guided the 
thinker are immaterial to appreciating his achieve- 
ment. Biographers are busy today explaining the work 
of the genius as a product of his complexes and libidi- 
nous impulses and a sublimation of his sexual desires. 
Their studies may be valuable contributions to psychol- 


ogy, or rather to thymology (see below p. 265), but 
they do not affect in any way the evaluation of the biog- 
raphee's exploits. The most sophisticated psychoana- 
lytical examination of Pascal's life tells us nothing about 
the scientific soundness or unsoundness of his mathe- 
matical and philosophical doctrines. 

If the failures and errors of a doctrine are unmasked 
by discursive reasoning, historians and biographers may 
try to explain them by tracing them back to their au- 
thor's bias. But if no tenable objections can be raised 
against a theory, it is immaterial what kind of motives 
inspired its author. Granted that he was biased. But 
then we must realize that his alleged bias produced 
theorems which successfully withstood all objections. 

Reference to a thinker s bias is no substitute for a 
refutation of his doctrines by tenable arguments. Those 
who charge the economists with bias merely show that 
they are at a loss to refute their teachings by critical 

2. Common Weal versus Special Interests 

Economic policies are directed toward the attain- 
ment of definite ends. In dealing with them economics 
does not question the value attached to these ends by 
acting men. It merely investigates two points: First, 
whether or not the policies concerned are fit to attain 
the ends which those recommending and applying them 
want to attain. Secondly, whether these policies do not 
perhaps produce effects which, from the point of view 


of those recommending and applying them, are unde- 

It is true that the terms in which many economists, 
especially those of the older generations, expressed the 
result of their inquiries could easily be misinterpreted. 
In dealing with a definite policy they adopted a manner 
of speech which would have been adequate from the 
point of view of those who considered resorting to it in 
order to attain definite ends. Precisely because the 
economists were not biased and did not venture to 
question the acting men's choice of ends, they pre- 
sented the result of their deliberation in a mode of ex- 
pression which took the valuations of the actors for 
granted. People aim at definite ends when resorting to 
a tariff or decreeing minimum wage rates. When the 
economists thought such policies would attain the ends 
sought by their supporters, they called them good — just 
as a physician calls a certain therapy good because he 
takes the end — curing his patient — for granted. 

One of the most famous of the theorems developed 
by the Classical economists, Ricardo's theory of com- 
parative costs, is safe against all criticism, if we may 
judge by the fact that hundreds of passionate adver- 
saries over a period of a hundred and forty years have 
failed to advance any tenable argument against it. It is 
much more than merely a theory dealing with the ef- 
fects of free trade and protection. It is a proposition 
about the fundamental principles of human coopera- 
tion under the division of labor and specialization and 
the integration of vocational groups, about the origin 


and further intensification of social bonds between men, 
and should as such be called the law of association. It 
is indispensable for understanding the origin of civili- 
zation and the course of history. Contrary to popular 
conceptions, it does not say that free trade is good and 
protection bad. It merely demonstrates that protection 
is not a means to increase the supply of goods pro- 
duced. Thus it says nothing about protection's suita- 
bility or unsuitability to attain other ends, for instance 
to improve a nation's chance of defending its independ- 
ence in war. 

Those charging the economists with bias refer to 
their alleged eagerness to serve "the interests." In the 
context of their accusation this refers to selfish pursuit 
of the well-being of special groups to the prejudice of 
the common weal. Now it must be remembered that 
the idea of the common weal in the sense of a harmony 
of the interests of all members of society is a modern 
idea and that it owes its origin precisely to the teach- 
ings of the Classical economists. Older generations be- 
lieved that there is an irreconcilable conflict of interests 
among men and among groups of men. The gain of one 
is invariably the damage of others; no man profits but 
by the loss of others. We may call this tenet the Mon- 
taigne dogma because in modern times it was first 
expounded by Montaigne. It was the essence of the 
teachings of Mercantilism and the main target of the 
Classical economists' critique of Mercantilism, to which 
they opposed their doctrine of the harmony of the 
rightly understood or long-run interests of all members 
of a market society. The socialists and interventionists 


reject the doctrine of the harmony of interests. The 
socialists declare that there is irreconcilable conflict 
among the interests of the various social classes of a 
nation; while the interests of the proletarians demand 
the substitution of socialism for capitalism, those of the 
exploiters demand the preservation of capitalism. The 
nationalists declare that the interests of the various 
nations are irreconcilably in conflict. 

It is obvious that the antagonism of such incompati- 
ble doctrines can be resolved only by logical reasoning. 
But the opponents of the harmony doctrine are not 
prepared to submit their views to such examination. 
As soon as somebody criticizes their arguments and 
tries to prove the harmony doctrine they cry out bias. 
The mere fact that only they and not their adversaries, 
the supporters of the harmony doctrine, raise this se- 
proach of bias shows clearly that they are unable to 
reject their opponents' statements by ratiocination. 
They engage in the examination of the problems con- 
cerned with the prepossession that only biased apolo- 
gists of sinister interests can possibly contest the cor- 
rectness of their socialist or interventionist dogmas. In 
their eyes the mere fact that a man disagrees with their 
ideas is the proof of his bias. 

When carried to its ultimate logical consequences 
this attitude implies the doctrine of polylogism. Poly- 
logism denies the uniformity of the logical structure of 
the human mind. Every social class, every nation, race, 
or period of history is equipped with a logic that differs 
from the logic of other classes, nations, races, or ages. 
Hence bourgeois economics differs from proletarian 


economics, German physics from the physics of other 
nations, Aryan mathematics from Semitic mathematics. 
There is no need to examine here the essentials of the 
various brands of polylogism. 1 For polylogism never 
went beyond the simple declaration that a diversity of 
the mind's logical structure exists. It never pointed out 
in what these differences consist, for instance how the 
logic of the proletarians differs from that of the bour- 
geois. All the champions of polylogism did was to reject 
definite statements by referring to unspecified peculi- 
arities of their author's logic. 

3. Economics and Value 

The main argument of the Classical harmony doc- 
trine starts from the distinction between interests in the 
short run and those in the long run, the latter being 
referred to as the rightly understood interests. Let us 
examine the bearing of this distinction upon the prob- 
lem of privileges. 

One group of men certainly gains by a privilege 
granted to them. A group of producers protected by 
a tariff, a subsidy, or any other modern protectionist 
method against the competition of more efficient rivals 
gains at the expense of the consumers. But will the rest 
of the nation, taxpayers and buyers of the protected 
article, tolerate the privilege of a minority? They will 
only acquiesce in it if they themselves are benefited by 
an analogous privilege. Then everybody loses as much 
in his capacity as consumer as he wins in his capacity 

1. See Mises, Human Action, pp. 74r-89. 


as producer. Moreover all are harmed by the substitu- 
tion of less efficient for more efficient methods of pro- 

If one deals with economic policies from the point 
of view of this distinction between long- and short-run 
interests, there is no ground for charging the economist 
with bias. He does not condemn featherbedding of the 
railroadmen because it benefits the railroadmen at the 
expense of other groups whom he likes better. He shows 
that the railroadmen cannot prevent featherbedding 
from becoming a general practice and that then, that 
is, in the long run, it hurts them no less than other 

Of course, the objections the economists advanced to 
the plans of the socialists and interventionists cany no 
weight with those who do not approve of the ends 
which the peoples of Western civilization take for 
granted. Those who prefer penury and slavery to mate- 
rial well-being and all that can only develop where 
there is material well-being may deem all these objec- 
tions irrelevant. But the economists have repeatedly 
emphasized that they deal with socialism and interven- 
tionism from the point of view of the generally ac- 
cepted values of Western civilization. The socialists 
and interventionists not only have not — at least not 
openly — denied these values but have emphatically de- 
clared that the realization of their own program will 
achieve them much better than will capitalism. 

It is true that most socialists and many intervention- 
ists attach value to equalizing the standard of living of 
all individuals. But the economists did not question the 


value judgment implied. All they did was to point out 
the inevitable consequences of equalization. They did 
not say: The end you are aiming at is bad; they said: 
Realization of this end will bring effects which you 
yourselves deem more undesirable than inequality. 

4. Bias and Intolerance 

It is obvious that there are many people who let their 
reasoning be influenced by judgments of value, and that 
bias often corrupts the thinking of men. What is to be 
rejected is the popular doctrine that it is impossible to 
deal with economic problems without bias and that 
mere reference to bias, without unmasking fallacies in 
the chain of reasoning, is sufficient to explode a theory. 

The emergence of the bias doctrine implies in fact 
categorical acknowledgment of the impregnability of 
the teachings of economics against which the reproach 
of bias has been leveled. It was the first stage in the re- 
turn to intolerance and persecution of dissenters which 
is one of the main features of our age. As dissenters are 
guilty of bias, it is right to "liquidate" them. 

Chapter 3. The Quest for Absolute Values 

1. The Issue 

In dealing with judgments of value we refer to facts, 
that is, to the way in which people really choose ulti- 
mate ends. While the value judgments of many people 
are identical, while it is permissible to speak of certain 
almost universally accepted valuations, it would be 
manifestly contrary to fact to deny that there is diver- 
sity in passing judgments of value. 

From time immemorial an immense majority of men 
have agreed in preferring the effects produced by 
peaceful cooperation — at least among a limited number 
of people — to the effects of a hypothetical isolation of 
each individual and a hypothetical war of all against 
all. To the state of nature they have preferred the state 
of civilization, for they sought the closest possible at- 
tainment of certain ends — the preservation of life and 
health — which, as they rightly thought, require social 
cooperation. But it is a fact that there have been and 
are also men who have rejected these values and conse- 
quently preferred the solitary life of an anchorite to life 
within society. 

It is thus obvious that any scientific treatment of the 
problems of value judgments must take into full account 
the fact that these judgments are subjective and chang- 
ing. Science seeks to know what is, and to formulate 



existential propositions describing the universe as it is. 
With regard to judgments of value it cannot assert more 
than that they are uttered by some people, and inquire 
what the effects of action guided by them must be. Any 
step beyond these limits is tantamount to substituting 
a personal judgment of value for knowledge of reality. 
Science and our organized body of knowledge teach 
only what is, not what ought to be. 

This distinction between a field of science dealing 
exclusively with existential propositions and a field of 
judgments of value has been rejected by the doctrines 
that maintain there are eternal absolute values which 
it is just as much the task of scientific or philosophical 
inquiry to discover as to discover the laws of physics. 
The supporters of these doctrines contend that there is 
an absolute hierarchy of values. They tried to define 
the supreme good. They said it is permissible and nec- 
essary to distinguish in the same way between true and 
false, correct and incorrect judgments of value as be- 
tween true and false, correct and incorrect existential 
propositions. 1 Science is not restricted to the description 
of what is. There is, in their opinion, another fully le- 
gitimate branch of science, the normative science of 
ethics, whose task it is to show the true absolute values 
and to set up norms for the correct conduct of men. 

The plight of our age, according to the supporters of 
this philosophy, is that people no longer acknowledge 
these eternal values and do not let their actions be 
guided by them. Conditions were much better in the 

1. Franz Brentano, Vom Urtprung stttlicher Erkenntnis, 2d ed. 
Leipzig, 1921. 


past, when the peoples of Western civilization were 
unanimous in endorsing the values of Christian ethics. 
In what follows, we will deal with the issues raised 
by this philosophy. 

2. Conflicts within Society 

Having discussed the fact that men disagree with 
regard to their judgments of value and their choice of 
ultimate ends, we must stress that many conflicts 
which are commonly considered valuational are ac- 
tually caused by disagreement concerning the choice 
of the best means to attain ends about which the con- 
flicting parties agree. The problem of the suitability or 
unsuitability of definite means is to be solved by exis- 
tential propositions, not by judgments of value. Its 
treatment is the main topic of applied science. 

It is thus necessary to be aware in dealing with con- 
troversies concerning human conduct whether the dis- 
agreement refers to the choice of ends or to that of 
means. This is often a difficult task. For the same things 
are ends to some people, means to others. 

With the exception of the small, almost negligible 
number of consistent anchorites, all people agree in 
considering some kind of social cooperation between 
men the foremost means to attain any ends they may 
aim at. This undeniable fact provides a common ground 
on which political discussions between men become 
possible. The spiritual and intellectual unity of all speci- 
mens of homo sapiens manifests itself in the fact that 
the immense majority of men consider the same thing 


— social cooperation — the best means of satisfying the 
biological urge, present in every living being, to pre- 
serve the life and health of the individual and to propa- 
gate the species. 

It is permissible to call this almost universal accept- 
ance of social cooperation a natural phenomenon. In 
resorting to this mode of expression and asserting that 
conscious association is in conformity with human 
nature, one implies that man is characterized as man 
by reason, is thus enabled to become aware of the great 
principle of cosmic becoming and evolution, viz., dif- 
ferentiation and integration, and to make intentional 
use of this principle to improve his condition. But one 
must not consider cooperation among the individuals 
of a biological species a universal natural phenomenon. 
The means of sustenance are scarce for every species of 
living beings. Hence biological competition prevails 
among the members of all species, an irreconcilable 
conflict of vital "interests." Only a part of those who 
come into existence can survive. Some perish because 
others of their own species have snatched away from 
them the means of sustenance. An implacable struggle 
for existence goes on among the members of each spe- 
cies precisely because they are of the same species and 
compete with other members of it for the same scarce 
opportunities of survival and reproduction. Man alone 
by dint of his reason substituted social cooperation for 
biological competition. What made social cooperation 
possible is, of course, a natural phenomenon, the higher 
productivity of labor accomplished under the principle 
of the division of labor and specialization of tasks. But 


it was necessary to discover this principle, to compre- 
hend its bearing upon human affairs, and to employ it 
consciously as a means in the struggle for existence. 

The fundamental facts about social cooperation have 
been misinterpreted by the school of social Darwinism 
as well as by many of its critics. The former maintained 
that war among men is an inevitable phenomenon and 
that all attempts to bring about lasting peace among 
nations are contrary to nature. The latter retorted that 
the struggle for existence is not among members of the 
same animal species but among the members of various 
species. As a rule tigers do not attack other tigers but, 
taking the line of least resistance, weaker animals. 
Hence, they concluded, war among men, who are speci- 
mens of the same species, is unnatural. 1 

Both schools misunderstood the Darwinian concept 
of the struggle for survival. It does not refer merely to 
combat and blows. It means metaphorically the tena- 
cious impulse of beings to keep alive in spite of all 
factors detrimental to them. As the means of sustenance 
are scarce, biological competition prevails among all in- 
dividuals — whether of the same or different species — 
which feed on the same stuff. It is immaterial whether 
or not tigers fight one another. What makes every speci- 
men of an animal species a deadly foe of every other 
specimen is the mere fact of their life-and-death rivalry 
in their endeavors to snatch a sufficient amount of food. 
This inexorable rivalry is present also among animals 
gregariously roaming in droves and flocks, among ants 

1. On this controversy see Paul Barth, Die Philosophic der Ge- 
achichte ah Soziologie (4th ed. Leipzig, 1922), pp. 289-92. 


of the same hill and bees of the same swarm, among 
the brood hatched by common parents and among the 
seeds ripened by the same plant. Only man has the 
power to escape to some extent from the rule of this 
law by intentional cooperation. So long as there is social 
cooperation and population has not increased beyond 
the optimum size, biological competition is suspended. 
It is therefore inappropriate to refer to animals and 
plants in dealing with the social problems of man. 

Yet man's almost universal acknowledgment of the 
principle of social cooperation did not result in agree- 
ment regarding all interhuman relations. While almost 
all men agree in looking upon social cooperation as the 
foremost means for realizing all human ends, whatever 
they may be, they disagree as to the extent to which 
peaceful social cooperation is a suitable means for at- 
taining their ends and how far it should be resorted to. 

Those whom we may call the harmonists base their 
argument on Ricardo's law of association and on 
Malthus' principle of population. They do not, as some 
of their critics believe, assume that all men are bio- 
logically equal. They take fully into account the fact 
that there are innate biological differences among var- 
ious groups of men as well as among individuals belong- 
ing to the same group. Ricardo's law has shown that 
cooperation under the principle of the division of labor 
is favorable to all participants. It is an advantage for 
every man to cooperate with other men, even if these 
others are in every respect — mental and bodily capac- 
ities and skills, diligence and moral worth — inferior. 
From Malthus' principle one can deduce that there is, 


in any given state of the supply of capital goods and 
knowledge of how to make the best use of natural 
resources, an optimum size of population. So long as 
population has not increased beyond this size, the addi- 
tion of newcomers improves rather than impairs the 
conditions of those already cooperating. 

In the philosophy of the antiharmonists, the various 
schools of nationalism and racism, two different lines 
of reasoning must be distinguished. One is the doctrine 
of the irreconcilable antagonism prevailing among var- 
ious groups, such as nations or races. As the antihar- 
monists see it, community of interests exists only within 
the group among its members. The interests of each 
group and of each of its members are implacably op- 
posed to those of all other groups and of each of their 
members. So it is "natural" there should be perpetual 
war among various groups. This natural state of war of 
each group against every other group may sometimes 
be interrupted by periods of armistice, falsely labeled 
periods of peace. It may also happen that sometimes in 
warfare a group cooperates in alliances with other 
groups. Such alliances are temporary makeshifts of 
politics. They do not in the long run affect the inexo- 
rable natural conflict of interests. Having, in coopera- 
tion with some allied groups, defeated several of the 
hostile groups, the leading group in the coalition turns 
against its previous allies in order to annihilate them too 
and to establish its own world supremacy. 

The second dogma of the nationalist and racist phi- 
losophies is considered by its supporters a logical con- 
clusion derived from their first dogma. As they see it, 


human conditions involve forever irreconcilable con- 
flicts, first among the various groups fighting one an- 
other, later, after the final victory of the master group, 
between the latter and the enslaved rest of mankind. 
Hence this supreme elite group must always be ready 
to fight, first to crush the rival groups, then to quell re- 
bellions of the slaves. The state of perpetual prepared- 
ness for war enjoins upon it the necessity of organizing 
society after the pattern of an army. The army is not 
an instrument destined to serve a body politic; it is 
rather the very essence of social cooperation, to which 
all other social institutions are subservient. The individ- 
uals are not citizens of a commonwealth; they are sol- 
diers of a fighting force and as such bound to obey 
unconditionally the orders issued by the supreme com- 
mander. They have no civil rights, merely military 

Thus even the fact that the immense majority of men 
look upon social cooperation as the foremost means to 
attain all desired ends does not provide a basis for a 
wide-reaching agreement concerning either ends or 

3. A Remark on the Alleged Medieval Unanimity 

In examining the doctrines of eternal absolute values 
we must also ask whether it is true or not that there was 
a period of history in which all peoples of the West 
were united in their acceptance of a uniform system 
of ethical norms. 

Until the beginning of the fourth century the Chris- 


tian creed was spread by voluntary conversions. There 
were also later voluntary conversions of individuals and 
of whole peoples. But from the days of Theodosius I 
on, the sword began to play a prominent role in the dis- 
semination of Christianity. Pagans and heretics were 
compelled by force of arms to submit to the Christian 
teachings. For many centuries religious problems were 
decided by the outcome of battles and wars. Military 
campaigns determined the religious allegiance of na- 
tions. Christians of the East were forced to accept the 
creed of Mohammed, and pagans in Europe and Amer- 
ica were forced to accept the Christian faith. Secular 
power was instrumental in the struggle between the 
Reformation and the Counter Reformation. 

There was religious uniformity in Europe of the 
Middle Ages as both paganism and heresies were eradi- 
cated with fire and sword. All of Western and Central 
Europe recognized the Pope as the Vicar of Christ. But 
this did not mean that all people agreed in their judg- 
ments of value and in the principles directing their 
conduct. There were few people in medieval Europe 
who lived according to the precepts of the Gospels. 
Much has been said and written about the truly Chris- 
tian spirit of the code of chivalry and about the reli- 
gious idealism that guided the conduct of the knights. 
Yet anything less compatible with Luke 6:27-9 than 
the rules of chivalry can hardly be conceived. The gal- 
lant knights certainly did not love their enemies, they 
did not bless those who cursed them, and they did not 
offer the left cheek to him who smote them on the right 
cheek. The Catholic Church had the power to prevent 


scholars and writers from challenging the dogmas as 
defined by the Pope and the Councils and to force the 
secular rulers to yield to some of its political claims. 
But it could preserve its position only by condoning 
conduct on the part of the laity which defied most, if 
not all, of the principles of the Gospels. The values that 
determined the actions of the ruling classes were en- 
tirely different from those that the Church preached. 
Neither did the peasants comply with Matthew 6:25-8. 
And there were courts and judges in defiance of Mat- 
thew 7:1: "Judge not, that you be not judged." 

4. The Idea of Natural Law 

The most momentous attempt to find an absolute and 
eternal standard of value is presented by the doctrine 
of natural law. 

The term "natural law" has been claimed by various 
schools of philosophy and jurisprudence. Many doc- 
trines have appealed to nature in order to provide a 
justification for their postulates. Many manifestly spuri- 
ous theses have been advanced under the label of natu- 
ral law. It was not difficult to explode the fallacies com- 
mon to most of these lines of thought. And it is no 
wonder that many thinkers become suspicious as soon 
as natural law is referred to. 

Yet it would be a serious blunder to ignore the fact 
that all the varieties of the doctrine contained a sound 
idea which could neither be compromised by connec- 
tion with untenable vagaries nor discredited by any 
criticism. Long before the Classical economists discov- 


ered that a regularity in the sequence of phenomena 
prevails in the field of human action, the champions of 
natural law were dimly aware of this inescapable fact. 
From the bewildering diversity of doctrines presented 
under the rubric of natural law there finally emerged a 
set of theorems which no caviling can ever invalidate. 
There is first the idea that a nature-given order of 
things exists to which man must adjust his actions if he 
wants to succeed. Second: the only means available to 
man for the cognizance of this order is thinking and 
reasoning, and no existing social institution is exempt 
from being examined and appraised by discursive rea- 
soning. Third: there is no standard available for ap- 
praising any mode of acting either of individuals or of 
groups of individuals but that of the effects produced 
by such action. Carried to its ultimate logical conse- 
quences, the idea of natural law led eventually to ra- 
tionalism and utilitarianism. 

The march of social philosophy toward this ines- 
capable conclusion was slowed down by many obstacles 
which could not be removed easily. There were nu- 
merous pitfalls on the way, and many inhibitions ham- 
pered the philosophers. To deal with the vicissitudes of 
the evolution of these doctrines is a task of the history 
of philosophy. In the context of our investigation it is 
enough to mention only two of these problems. 

There was the antagonism between the teachings of 
reason and the dogmas of the Church. Some philoso- 
phers were prepared to ascribe unconditional suprem- 
acy to the latter. Truth and certainty, they declared, 
are to be found only in revelation. Man's reason can 


err, and man can never be sure that his speculations 
were not led astray by Satan. Other thinkers did not 
accept this solution of the antagonism. To reject reason 
beforehand was in their opinion preposterous. Reason 
too stems from God, who endowed man with it, so there 
can be no genuine contradiction between dogma and 
the correct teachings of reason. It is the task of philoso- 
phy to show that ultimately both agree. The central 
problem of Scholastic philosophy was to demonstrate 
that human reason, unaided by revelation and Holy 
Writ, taking recourse only to its proper methods of 
ratiocination, is capable of proving the apodictic truth 
of the revealed dogmas. 1 A genuine conflict of faith and 
reason does not exist. Natural law and divine law do 
not disagree. 

However, this way of dealing with the matter does 
not remove the antagonism; it merely shifts it to an- 
other field. The conflict is no longer a conflict between 
faith and reason but between Thomist philosophy and 
other modes of philosophizing. We may leave aside the 
genuine dogmas such as Creation, Incarnation, the 
Trinity, as they have no direct bearing on the problems 
of interhuman relations. But many issues remain with 
regard to which most, if not all, Christian churches and 
denominations are not prepared to yield to secular rea- 
soning and an evaluation from the point of view of 
social utility. Thus the recognition of natural law on the 
part of Christian theology was only conditional. It 
referred to a definite type of natural law, not opposed 

1. Louis Rougier, La Scholastique et le Thomisme (Paris, 1925), 
pp. 102-5, 116-17, 460-562. 


to the teachings of Christ as each of these churches and 
denominations interpreted them. It did not acknowl- 
edge the supremacy of reason. It was incompatible with 
the principles of utilitarian philosophy. 

A second factor that obstructed the evolution of 
natural law toward a consistent and comprehensive 
system of human action was the erroneous theory of 
the biological equality of all men. In repudiating argu- 
ments advanced in favor of legal discrimination among 
men and of a status society, many advocates of equality 
before the law overstepped the mark. To hold that "at 
birth human infants, regardless of their heredity, are 
as equal as Fords" 2 is to deny facts so obvious that it 
brought the whole philosophy of natural law into dis- 
repute. In insisting on biological equality the natural 
law doctrine pushed aside all the sound arguments ad- 
vanced in favor of the principle of equality before the 
law. It thus opened the way for the spread of theories 
advocating all sorts of legal discrimination against in- 
dividuals and groups of individuals. It supplanted the 
teachings of liberal social philosophy. Stirring up hatred 
and violence, foreign wars and domestic revolutions, it 
prepared mankind for the acceptance of aggressive na- 
tionalism and racism. 

The chief accomplishment of the natural law idea 
was its rejection of the doctrine (sometimes called legal 
positivism) according to which the ultimate source of 
statute law is to be seen in the superior military power 
of the legislator who is in a position to beat into sub- 

2. Horace M. Kallen, "Behaviorism," Encyclopaedia of the Social 
Sciences ( Macmillan, 1930-35), 3, 498. 


mission all those defying his ordinances. Natural law 
taught that statutory laws can be bad laws, and it 
contrasted with the bad laws the good laws to which 
it ascribed divine or natural origin. But it was an illu- 
sion to deny that the best system of laws cannot be 
put into practice unless supported and enforced by 
military supremacy. The philosophers shut their eyes 
to manifest historical facts. They refused to admit that 
the causes they considered just made progress only 
because their partisans defeated the defenders of the 
bad causes. The Christian faith owes it success to a 
long series of victorious battles and campaigns, from 
various battles between rival Roman imperators and 
caesars down to the campaigns that opened the Orient 
to the activities of missionaries. The cause of American 
independence triumphed because the British forces 
were defeated by the insurgents and the French. It 
is a sad truth that Mars is for the big battalions, not 
for the good causes. To maintain the opposite opinion 
implies the belief that the outcome of an armed con- 
flict is an ordeal by combat in which Cod always grants 
victory to the champions of the just cause. But such an 
assumption would annul all the essentials of the doc- 
trine of natural law, whose basic idea was to contrast to 
the positive laws, promulgated and enforced by those 
in power, a "higher" law grounded in the innermost na- 
ture of man. 

Yet all these deficiencies and contradictions of the 
doctrine of natural law must not prevent us from rec- 
ognizing its sound nucleus. Hidden in a heap of illusions 
and quite arbitrary prepossessions was the idea that 


every valid law of a country was open to critical exam- 
ination by reason. About the standard to be applied 
in such an examination the older representatives of the 
school had only vague notions. They referred to nature 
and were reluctant to admit that the ultimate standard 
of good and bad must be found in the effects produced 
by a law. Utilitarianism finally completed the intellec- 
tual evolution inaugurated by the Greek Sophists. 

But neither utilitarianism nor any of the varieties of 
the doctrine of natural law could or did find a way to 
eliminate the conflict of antagonistic judgments of 
value. It is useless to emphasize that nature is the ulti- 
mate arbiter of what is right and what is wrong. Nature 
does not clearly reveal its plans and intentions to man. 
Thus the appeal to natural law does not settle the dis- 
pute. It merely substitutes dissent concerning the inter- 
pretation of natural law for dissenting judgments of 
value. Utilitarianism, on the other hand, does not deal 
at all with ultimate ends and judgments of value. It 
invariably refers only to means. 

5. Revelation 

Revealed religion derives its authority and authen- 
ticity from the communication to man of the Supreme 
Being's will. It gives the faithful indisputable certainty. 

However, people disagree widely about the content 
of revealed truth as well as about its correct — orthodox 
— interpretation. For all the grandeur, majesty, and sub- 
limity of religious feeling, irreconcilable conflict exists 
among various faiths and creeds. Even if unanimity 


could be attained in matters of the historical authentic- 
ity and reliability of revelation, the problem of the ve- 
racity of various exegetic interpretations would still 

Every faith claims to possess absolute certainty. But 
no religious faction knows of any peaceful means that 
will invariably induce dissenters to divest themselves 
voluntarily of their error and to adopt the true creed. 

If people of different faiths meet for peaceful discus- 
sion of their differences, they can find no common basis 
for their colloquy but the statement: by their fruits ye 
shall know them. Yet this utilitarian device is of no use 
so long as men disagree about the standard to be ap- 
plied in judging the effects. 

The religious appeal to absolute eternal values did 
not do away with conflicting judgments of value. It 
merely resulted in religious wars. 

6. Atheistic Intuition 

Other attempts to discover an absolute standard of 
values were made without reference to a divine real- 
ity. Emphatically rejecting all traditional religions and 
claiming for their teachings the epithet "scientific," 
various writers tried to substitute a new faith for the 
old ones. They claimed to know precisely what the 
mysterious power that directs all cosmic becoming has 
in store for mankind. They proclaimed an absolute 
standard of values. Good is what works along the lines 
that this power wants mankind to follow; everything 
else is bad. In their vocabulary "progressive" is a 


synonym of good and "reactionary" a synonym of bad. 
Inevitably progress will triumph over reaction because 
it is impossible for men to divert the course of history 
from the direction prescribed by the plan of the mys- 
terious prime mover. Such is the metaphysics of Karl 
Marx, the faith of contemporary self-styled progres- 

Marxism is a revolutionary doctrine. It expressly 
declares that the design of the prime mover will be 
accomplished by civil war. It implies that ultimately 
in the battles of these campaigns the just cause, that 
is, the cause of progress, must conquer. Then all con- 
flicts concerning judgments of value will disappear. The 
liquidation of all dissenters will establish the undis- 
puted supremacy of the absolute eternal values. 

This formula for the solution of conflicts of value 
judgments is certainly not new. It is a device known 
and practiced from time immemorial. Kill the infidels! 
Burn the heretics! What is new is merely the fact that 
today it is sold to the public under the label of "science." 

7. The Idea of Justice 

One of the motives that impel men to search for an 
absolute and immutable standard of value is the pre- 
sumption that peaceful cooperation is possible only 
among people guided by the same judgments of value. 

It is obvious that social cooperation would not have 
evolved and could not be preserved if the immense 
majority were not to consider it as the means for the 
attainment of all their ends. Striving after the preserva- 


tion of his own life and health and after the best pos- 
sible removal of felt uneasiness, the individual looks 
upon society as a means, not as an end. There is no 
perfect unanimity even with regard to this point. But 
we may neglect the dissent of the ascetics and the an- 
chorites, not because they are few, but because their 
plans are not affected if other people, in the pursuit of 
their plans, cooperate in society. 

There prevails among the members of society dis- 
agreement with regard to the best method for its 
organization. But this is a dissent concerning means, 
not ultimate ends. The problems involved can be dis- 
cussed without any reference to judgments of value. 

Of course, almost all people, guided by the tradi- 
tional manner of dealing with ethical precepts, peremp- 
torily repudiate such an explanation of the issue. Social 
institutions, they assert, must be just. It is base to judge 
them merely according to their fitness to attain definite 
ends, however desirable these ends may be from any 
other point of view. What matters first is justice. The 
extreme formulation of this idea is to be found in the 
famous phrase: fiat fustitia, per eat mundus. Let justice 
be done, even if it destroys the world. Most supporters 
of the postulate of justice will reject this maxim as ex- 
travagant, absurd, and paradoxical. But it is not more 
absurd, merely more shocking, than any other reference 
to an arbitrary notion of absolute justice. It clearly 
shows the fallacies of the methods applied in the dis- 
cipline of intuitive ethics. 

The procedure of this normative quasi science is to 
derive certain precepts from intuition and to deal with 


them as if their adoption as a guide to action would not 
affect the attainment of any other ends considered de- 
sirable. The moralists do not bother about the necessary 
consequences of the realization of their postulates. We 
need not discuss the attitudes of people for whom the 
appeal to justice is manifestly a pretext, consciously or 
subconsciously chosen, to disguise their short-run in- 
terests, nor expose the hypocrisy of such makeshift 
notions of justice as those involved in the popular con- 
cepts of just prices and fair wages. 1 The philosophers 
who in their treatises of ethics assigned supreme value 
to justice and applied the yardstick of justice to all 
social institutions were not guilty of such deceit. They 
did not support selfish group concerns by declaring 
them alone just, fair, and good, and smear all dissenters 
by depicting them as the apologists of unfair causes. 
They were Platonists who believed that a perennial 
idea of absolute justice exists and that it is the duty of 
man to organize all human institutions in conformity 
with this ideal. Cognition of justice is imparted to man 
by an inner voice, i.e., by intuition. The champions of 
this doctrine did not ask what the consequences of 
realizing the schemes they called just would be. They 
silently assumed either that these consequences will be 
beneficial or that mankind is bound to put up even with 
very painful consequences of justice. Still less did these 
teachers of morality pay attention to the fact that peo- 
ple can and really do disagree with regard to the inter- 
pretation of the inner voice and that no method of 
peacefully settling such disagreements can be found. 

1. See Mises, Human Action, pp. 719-25. 


All these ethical doctrines have failed to comprehend 
that there is, outside of social bonds and preceding, 
temporally or logically, the existence of society, nothing 
to which the epithet "just" can be given. A hypothetical 
isolated individual must under the pressure of biolog- 
ical competition look upon all other people as deadly 
foes. His only concern is to preserve his own life and 
health; he does not need to heed the consequences 
which his own survival has for other men; he has no use 
for justice. His only solicitudes are hygiene and defense. 
But in social cooperation with other men the individual 
is forced to abstain from conduct incompatible with 
life in society. Only then does the distinction between 
what is just and what is unjust emerge. It invariably 
refers to interhuman social relations. What is beneficial 
to the individual without affecting his fellows, such as 
the observance of certain rules in the use of some drugs, 
remains hygiene. 

The ultimate yardstick of justice is conduciveness to 
the preservation of social cooperation. Conduct suited 
to preserve social cooperation is just, conduct detri- 
mental to the preservation of society is unjust. There 
cannot be any question of organizing society according 
to the postulates of an arbitrary preconceived idea of 
justice. The problem is to organize society for the best 
possible realization of those ends which men want to 
attain by social cooperation. Social utility is the only 
standard of justice. It is the sole guide of legislation. 

Thus there are no irreconcilable conflicts between 
selfishness and altruism, between economics and ethics, 
between the concerns of the individual and those of so- 


ciety. Utilitarian philosophy and its finest product, eco- 
nomics, reduced these apparent antagonisms to the 
opposition of short-run and long-run interests. Society 
could not have come into existence or been preserved 
without a harmony of the rightly understood interests 
of all its members. 

There is only one way of dealing with all problems 
of social organization and the conduct of the members 
of society, viz., the method applied by praxeology and 
economics. No other method can contribute anything to 
the elucidation of these matters. 

The concept of justice as employed by jurisprudence 
refers to legality, that is, to legitimacy from the point 
of view of the valid statutes of a country. It means jus- 
tice de lege lata. The science of law has nothing to say 
de lege ferenda, i.e., about the laws as they ought to be. 
To enact new laws and to repeal old laws is the task of 
the legislature, whose sole criterion is social utility. The 
assistance the legislator can expect from lawyers refers 
only to matters of legal technique, not to the gist of 
the statutes and decrees. 

There is no such thing as a normative science, a sci- 
ence of what ought to be. 

8. The Utilitarian Doctrine Restated 

The essential teachings of utilitarian philosophy as 
applied to the problems of society can be restated as 

Human effort exerted under the principle of the divi- 
sion of labor in social cooperation achieves, other things 


remaining equal, a greater output per unit of input 
than the isolated efforts of solitary individuals. Man's 
reason is capable of recognizing this fact and of adapt- 
ing his conduct accordingly. Thus social cooperation 
becomes for almost every man the great means for the 
attainment of all ends. An eminently human common 
interest, the preservation and intensification of social 
bonds, is substituted for pitiless biological competition, 
the significant mark of animal and plant life. Man be- 
comes a social being. He is no longer forced by the in- 
evitable laws of nature to look upon all other specimens 
of his animal species as deadly foes. Other people be- 
come his fellows. For animals the generation of every 
new member of the species means the appearance of a 
new rival in the struggle for life. For man, until the 
optimum size of population is reached, it means rather 
an improvement than a deterioration in his quest for 
material well-being. 

Notwithstanding all his social achievements man 
remains in biological structure a mammal. His most 
urgent needs are nourishment, warmth, and shelter. 
Only when these wants are satisfied can he concern 
himself with other needs, peculiar to the human species 
and therefore called specifically human or higher needs. 
Also the satisfaction of these depends as a rule, at least 
to some extent, on the availability of various material 
tangible things. 

As social cooperation is for acting man a means and 
not an end, no unanimity with regard to value judg- 
ments is required to make it work. It is a fact that almost 
all men agree in aiming at certain ends, at those pleas- 


ures which ivory-tower moralists disdain as base and 
shabby. But it is no less a fact that even the most sub- 
lime ends cannot be sought by people who have not first 
satisfied the wants of their animal body. The loftiest 
exploits of philosophy, art, and literature would never 
have been performed by men living outside of society. 

Moralists praise the nobility of people who seek a 
thing for its own sake. "Deutsch sein heisst eine Sache 
um ihrer selbst willen tun," declared Richard Wagner, 1 
and the Nazis, of all people, adopted the dictum as a 
fundamental principle of their creed. Now what is 
sought as an ultimate end is valued according to the im- 
mediate satisfaction to be derived from its attainment. 
There is no harm in declaring elliptically that it is 
sought for its own sake. Then Wagner's phrase is re- 
duced to the truism: Ultimate ends are ends and not 
means for the attainment of other ends. 

Moralists furthermore level against utilitarianism the 
charge of ( ethical ) materialism. Here too they miscon- 
strue the utilitarian doctrine. Its gist is the cognition 
that action pursues definite chosen ends and that conse- 
quently there can be no other standard for appraising 
conduct but the desirability or undesirability of its 
effects. The precepts of ethics are designed to preserve, 
not to destroy, the "world." They may call upon people 
to put up with undesirable short-run effects in order 
to avoid producing still more undesirable long-run 
effects. But they must never recommend actions whose 
effects they themselves deem undesirable for the sole 

1. In Deutsche Kunst und Deutsche Politik, Samtliche Werke (6th 
ed. Leipzig, Breitkopf and Hartel), 8, 96. 


purpose of not defying an arbitrary rule derived from 
intuition. The formula fiat justitia, pereat mundus is 
exploded as sheer nonsense. An ethical doctrine that 
does not take into full account the effects of action is 
mere fancy. 

Utilitarianism does not teach that people should 
strive only after sensuous pleasure (though it recog- 
nizes that most or at least many people behave in this 
way). Neither does it indulge in judgments of value. By 
its recognition that social cooperation is for the im- 
mense majority a means for attaining all their ends, it 
dispels the notion that society, the state, the nation, or 
any other social entity is an ultimate end and that in- 
dividual men are the slaves of that entity. It rejects the 
philosophies of universalism, collectivism, and totali- 
tarianism. In this sense it is meaningful to call utili- 
tarianism a philosophy of individualism. 

The collectivist doctrine fails to recognize that social 
cooperation is for man a means for the attainment of all 
his ends. It assumes that irreconcilable conflict prevails 
between the interests of the collective and those of in- 
dividuals, and in this conflict it sides unconditionally 
with the collective entity. The collective alone has real 
existence; the individuals' existence is conditioned by 
that of the collective. The collective is perfect and can 
do no wrong. Individuals are wretched and refractory; 
their obstinacy must be curbed by the authority to 
which God or nature has entrusted the conduct of 
society's affairs. The powers that be, says the Apostle 
Paul, are ordained of God. 2 They are ordained by nature 

2. Epistle to the Romans 13:1. 


or by the superhuman factor that directs the course of 
all cosmic events, says the atheist collectivist. 

Two questions immediately arise. First: If it were 
true that the interests of the collective and those of in- 
dividuals are implacably opposed to one another, how 
could society function? One may assume that the in- 
dividuals would be prevented by force of arms from re- 
sorting to open rebellion. But it cannot be assumed that 
their active cooperation could be secured by mere com- 
pulsion. A system of production in which the only in- 
centive to work is the fear of punishment cannot last. 
It was this fact that made slavery disappear as a sys- 
tem of managing production. 

Second: If the collective is not a means by which in- 
dividuals may achieve their ends, if the collective's 
flowering requires sacrifices by the individuals which 
are not outweighed by advantages derived from social 
cooperation, what prompts the advocate of collectivism 
to assign to the concerns of the collective precedence 
over the personal wishes of the individuals? Can any 
argument be advanced for such exaltation of the collec- 
tive but personal judgments of value? 

Of course, everybody's judgments of value are per- 
sonal. If a man assigns a higher value to the concerns 
of a collective than to his other concerns, and acts ac- 
cordingly, that is his affair. So long as the collectivist 
philosophers proceed in this way, no objection can be 
raised. But they argue differently. They elevate their 
personal judgments of value to the dignity of an absolute 
standard of value. They urge other people to stop valu- 
ing according to their own will and to adopt uncondi- 


tionally the precepts to which collectivism has assigned 
absolute eternal validity. 

The futility and arbitrariness of the collectivist point 
of view become still more evident when one recalls that 
various collectivist parties compete for the exclusive 
allegiance of the individuals. Even if they employ the 
same word for their collectivist ideal, various writers 
and leaders disagree on the essential features of the 
thing they have in mind. The state which Ferdinand 
Lassalle called god and to which he assigned para- 
mountcy was not precisely the collectivist idol of Hegel 
and Stahl, the state of the Hohenzollern. Is mankind as 
a whole the sole legitimate collective or is each of the 
various nations? Is the collective to which the German- 
speaking Swiss owe exclusive allegiance the Swiss Con- 
federacy or the Volksgemeinschaft comprising all Ger- 
man-speaking men? All major social entities such as 
nations, linguistic groups, religious communities, party 
organizations have been elevated to the dignity of the 
supreme collective that overshadows all other collec- 
tives and claims the submission of the whole personality 
of all right-thinking men. But an individual can re- 
nounce autonomous action and unconditionally sur- 
render his self only in favor of one collective. Which 
collective this ought to be can be determined only by 
a quite arbitrary decision. The collective creed is by 
necessity exclusive and totalitarian. It craves the whole 
man and does not want to share him with any other col- 
lective. It seeks to establish the exclusive supreme 
validity of only one system of values. 

There is, of course, but one way to make one's own 


judgments of value supreme. One must beat into sub- 
mission all those dissenting. This is what all representa- 
tives of the various collectivist doctrines are striving for. 
They ultimately recommend the use of violence and 
pitiless annihilation of all those whom they condemn as 
heretics. Collectivism is a doctrine of war, intolerance, 
and persecution. If any of the collectivist creeds should 
succeed in its endeavors, all people but the great dicta- 
tor would be deprived of their essential human quality. 
They would become mere soulless pawns in the hands 
of a monster. 

The characteristic feature of a free society is that it 
can function in spite of the fact that its members dis- 
agree in many judgments of value. In the market 
economy business serves not only the majority but also 
various minorities, provided they are not too small in 
respect of the economic goods which satisfying their 
special wishes would require. Philosophical treatises 
are published — though few people read them, and the 
masses prefer other books or none — if enough readers 
are foreseen to recover the costs. 

9. On Aesthetic Values 

The quest for absolute standards of value was not 
limited to the field of ethics. It concerned aesthetic 
values as well. 

In ethics a common ground for the choice of rules of 
conduct is given so far as people agree in considering 
the preservation of social cooperation the foremost 
means for attaining all their ends. Thus virtually any 


controversy concerning the rules of conduct refers to 
means and not to ends. It is consequently possible to 
appraise these rules from the point of view of their 
adequacy for the peaceful functioning of society. Even 
rigid supporters of an intuitionist ethics could not help 
eventually resorting to an appraisal of conduct from the 
point of view of its effects upon human happiness. 1 

It is different with aesthetic judgments of value. In 
this field there is no such agreement as prevails with 
regard to the insight that social cooperation is the fore- 
most means for the attainment of all ends. All disagree- 
ment here invariably concerns judgments of value, none 
the choice of means for the realization of an end agreed 
upon. There is no way to reconcile conflicting judg- 
ments. There is no standard by which a verdict of "it 
pleases me" or "it does not please me" can be rectified. 

The unfortunate propensity to hypostatize various 
aspects of human thinking and acting has led to at- 
tempts to provide a definition of beauty and then to 
apply this arbitrary concept as a measure. However 
there is no acceptable definition of beauty but "that 
which pleases." There are no norms of beauty, and there 
is no such thing as a normative discipline of aesthetics. 
All that a professional critic of art and literature can say 
apart from historical and technical observations is that 
he likes or dislikes a work. The work may stir him to 
profound commentaries and disquisitions. But his judg- 
ments of value remain personal and subjective and do 

1. Even Kant. See Kritik der praktischen Vernunft, Pt. I, Bk. II, 
Sec. I ( Insel-Ausgabe, 5, 240-1 ) . Compare Friedrich Jodl, Geschichte 
der Ethik (2d ed. Stuttgart, 1912), 2, 35-8. 


not necessarily affect the judgments of other people. A 
discerning person will note with interest what a thought- 
ful writer says about the impression a work of art made 
upon him. But it depends upon a man's own discretion 
whether or not he will let his own judgment be influ- 
enced by that of other men, however excellent they may 

The enjoyment of art and literature presupposes a 
certain disposition and susceptibility on the part of the 
public. Taste is inborn to only a few. Others must culti- 
vate their aptitude for enjoyment. There are many 
things a man must learn and experience in order to be- 
come a connoisseur. But however a man may shine as 
a well-informed expert, his judgments of value remain 
personal and subjective. The most eminent critics and, 
for that matter, also the most noted writers, poets and 
artists widely disagreed in their appreciation of the most 
famous masterpieces. 

Only stilted pedants can conceive the idea that there 
are absolute norms to tell what is beautiful and what is 
not. They try to derive from the works of the past a code 
of rules with which, as they fancy, the writers and 
artists of the future should comply. But the genius does 
not cooperate with the pundit. 

10. The Historical Significance of the Quest 
for Absolute Values 

The value controversy is not a scholastic quarrel of 
interest only to hair-splitting dons. It touches upon the 
vital issues of human life. 


The world view that was displaced by modem ration- 
alism did not tolerate dissenting judgments of value. 
The mere fact of dissent was considered an insolent 
provocation, a mortal outrage to one's own feelings. Pro- 
tracted religious wars resulted. 

Although some intolerance, bigotry, and lust for per- 
secution is still left in religious matters, it is unlikely 
that religious passion will kindle wars in the near future. 
The aggressive spirit of our age stems from another 
source, from endeavors to make the state totalitarian 
and to deprive the individual of autonomy. 

It is true that the supporters of socialist and inter- 
ventionist programs recommend them only as means to 
attain ends which they have in common with all other 
members of society. They hold that a society organized 
according to their principles will best supply people 
with those material goods they toil to acquire. What 
more desirable societal state of affairs can be thought 
of than that "higher phase of communist society" in 
which, as Marx told us, society will give "to each ac- 
cording to his needs"? 

However, the socialists failed entirely in attempts to 
prove their case. Marx was at a loss to refute the well- 
founded objections that were raised even in his time 
about the minor difficulties of the socialist schemes. It 
was his helplessness in this regard that prompted him to 
develop the three fundamental doctrines of his dog- 
matism. 1 When economics later demonstrated why a 
socialist order, necessarily lacking any method of eco- 

1. Mises, Socialism (new ed., New Haven, Yale University Press, 
1951), pp. 15-16. 


nomic calculation, could never function as an economic 
system, all arguments advanced in favor of the great 
reform collapsed. From that time on socialists no longer 
based their hopes upon the power of their arguments 
but upon the resentment, envy, and hatred of the 
masses. Today even the adepts of "scientific" socialism 
rely exclusively upon these emotional factors. The basis 
of contemporary socialism and interventionism is judg- 
ments of value. Socialism is praised as the only fair va- 
riety of society's economic organization. All socialists, 
Marxians as well as non-Marxians, advocate socialism 
as the only system consonant with a scale of arbitrarily 
established absolute values. These values, they claim, 
are the only values that are valid for all decent people, 
foremost among them the workers, the majority in a 
modern industrial society. They are considered absolute 
because they are supported by the majority — and the 
majority is always right. 

A rather superficial and shallow view of the problems 
of government saw the distinction between freedom 
and despotism in an outward feature of the system of 
rule and administration, viz., in the number of people 
exercising direct control of the social apparatus of coer- 
cion and compulsion. Such a numerical standard is the 
basis of Aristotle's famous classification of the various 
forms of government. The concepts of monarchy, oli- 
garchy, and democracy still preserve this way of dealing 
with the matter. Yet its inadequacy is so obvious that 
no philosopher could avoid referring to facts which did 
not agree with it and therefore were considered para- 
doxical. There was for instance the fact, already well 


recognized by Greek authors, that tyranny was often, 
or even regularly, supported by the masses and was in 
this sense popular government. Modern writers have 
employed the term "Caesarism" for this type of govern- 
ment and have continued to look upon it as an excep- 
tional case conditioned by peculiar circumstances; but 
they have been at a loss to explain satisfactorily what 
made the conditions exceptional. Yet, fascinated by the 
traditional classification, people acquiesced in this 
superficial interpretation as long as it seemed that it 
had to explain only one case in modern European his- 
tory, that of the second French Empire. The final col- 
lapse of the Aristotelian doctrine came only when it 
had to face the "dictatorship of the proletariat" and the 
autocracy of Hitler, Mussolini, Peron, and other modern 
successors of the Greek tyrants. 

The way toward a realistic distinction between free- 
dom and bondage was opened, two hundred years ago, 
by David Hume's immortal essay, On the First Prin- 
ciples of Government. Government, taught Hume, is 
always government of the many by the few. Power is 
therefore always ultimately on the side of the governed, 
and the governors have nothing to support them but 
opinion. This cognition, logically followed to its conclu- 
sion, completely changed the discussion concerning 
liberty. The mechanical and arithmetical point of view 
was abandoned. If public opinion is ultimately respon- 
sible for the structure of government, it is also the 
agency that determines whether there is freedom or 
bondage. There is virtually only one factor that has the 
power to make people unfree — tyrannical public opin- 
ion. The struggle for freedom is ultimately not resistance 


to autocrats or oligarchs but resistance to the despotism 
of public opinion. It is not the struggle of the many 
against the few but of minorities — sometimes of a mi- 
nority of but one man — against the majority. The worst 
and most dangerous form of absolutist rule is that of an 
intolerant majority. Such is the conclusion arrived at 
by Tocqueville and John Stuart Mill. 

In his essay on Bentham, Mill pointed out why this 
eminent philosopher failed to see the real issue and why 
his doctrine found acceptance with some of the noblest 
spirits. Bentham, he says, lived "in a time of reaction 
against the aristocratic governments of modern Europe." 
The reformers of his age "have been accustomed to see 
the numerical majority everywhere unjustly depressed, 
everywhere trampled upon, or at the best overlooked, by 
governments." In such an age one could easily forget 
that "all countries which have long continued progres- 
sive, or been durably great, have been so because there 
has been an organized opposition to the ruling power, 
of whatever kind that power was. . . . Almost all the 
greatest men who ever lived have formed part of such 
an opposition. Wherever some such quarrel has not been 
going on — wherever it has been terminated by the 
complete victory of one of the contending principles, 
and no new contest has taken the place of the old — 
society has either hardened into Chinese stationariness, 
or fallen into dissolution." 2 

Much of what was sound in Bentham's political doc- 
trines was slighted by his contemporaries, was denied by 

2. John Stuart Mill on Bentham, ed. by F. R. Leavis under the 
title Mill on Bentham and Coleridge (New York, Stewart, 1950), 
pp. 85-7. 


later generations, and had little practical influence. But 
his failure to distinguish correctly between despotism 
and liberty was accepted without qualms by most nine- 
teenth-century writers. In their eyes true liberty meant 
the unbridled despotism of the majority. 

Lacking the power to think logically, and ignorant 
of history as well as of theory, the much admired "pro- 
gressive" writers gave up the essential idea of the En- 
lightenment: freedom of thought, speech, and com- 
munication. Not all of them were so outspoken as 
Comte and Lenin; but they all, in declaring that free- 
dom means only the right to say the correct things, not 
also the right to say the wrong things, virtually con- 
verted the ideas of freedom of thought and conscience 
into their opposite. It was not the Syllabus of Pope Pius 
IX that paved the way for the return of intolerance and 
the persecution of dissenters. It was the writings of the 
socialists. After a short-lived triumph of the idea of 
freedom, bondage made a comeback disguised as a 
consummation and completion of the philosophy of 
freedom, as the finishing of the unfinished revolution, 
as the final emancipation of the individual. 

The concept of absolute and eternal values is an in- 
dispensable element in this totalitarian ideology. A new 
notion of truth was established. Truth is what those in 
power declare to be true. The dissenting minority is 
undemocratic because it refuses to accept as true the 
opinion of the majority. All means to "liquidate" such 
rebellious scoundrels are "democratic" and therefore 
morally good. 

Chapter 4. The Negation of Valuation 

In dealing with judgments of value we have looked 
upon them as ultimate data not liable to any reduction 
to other data. We do not contend that judgments of 
value as they are uttered by men and used as guides to 
action are primary facts independent of all the other 
conditions of the universe. Such an assumption would 
be preposterous. Man is a part of the universe, he is the 
product of the forces operating in it, and all his thoughts 
and actions are, like the stars, the atoms, and the ani- 
mals, elements of nature. They are embedded in the in- 
exorable concatenation of all phenomena and events. 

Saying that judgments of value are ultimately given 
facts means that the human mind is unable to trace 
them back to those facts and happenings with which 
the natural sciences deal. We do not know why and how 
definite conditions of the external world arouse in a 
human mind a definite reaction. We do not know why 
different people and the same people at various in- 
stants of their lives react differently to the same ex- 
ternal stimuli. We cannot discover the necessary con- 
nection between an external event and the ideas it pro- 
duces within the human mind. 

To clarify this issue we must now analyze the doc- 
trines supporting the contrary opinion. We must deal 
with all varieties of materialism. 


Chapter 5. Determinism and Its Critics 

1. Determinism 

Whatever the true nature of the universe and of 
reality may be, man can learn about it only what the 
logical structure of his mind makes comprehensible to 
him. Reason, the sole instrument of human science and 
philosophy, does not convey absolute knowledge and 
final wisdom. It is vain to speculate about ultimate 
things. What appears to man's inquiry as an ultimate 
given, defying further analysis and reduction to some- 
thing more fundamental, may or may not appear such 
to a more perfect intellect. We do not know. 

Man cannot grasp either the concept of absolute 
nothingness or that of the genesis of something out 
of nothing. The very idea of creation transcends his 
comprehension. The God of Abraham, Isaac, and Jacob, 
whom Pascal in his Memorial opposed to that of the 
"philosophes et savants," is a living image and has a 
clear and definite meaning for the faithful believer. But 
the philosophers in their endeavors to construct a con- 
cept of Cod, his attributes, and his conduct of world 
affairs, became involved in insoluble contradictions and 
paradoxes. A Cod whose essence and ways of acting 
mortal man could neatly circumscribe and define would 
not resemble the God of the prophets, the saints, and 
the mystics. 



The logical structure of his mind enjoins upon man 
determinism and the category of causality. As man sees 
it, whatever happens in the universe is the necessary 
evolution of forces, powers, and qualities which were 
already present in the initial stage of the X out of which 
all things stem. All things in the universe are intercon- 
nected, and all changes are the effects of powers in- 
herent in things. No change occurs that would not be 
the necessary consequence of the preceding state. All 
facts are dependent upon and conditioned by their 
causes. No deviation from the necessary course of af- 
fairs is possible. Eternal law regulates everything. 

In this sense determinism is the epistemological basis 
of the human search for knowledge 1 Man cannot even 
conceive the image of an undetermined universe. In 
such a world there could not be any awareness of ma- 
terial things and their changes. It would appear a sense- 
less chaos. Nothing could be identified and distin- 
guished from anything else. Nothing could be expected 
and predicted. In the midst of such an environment 
man would be as helpless as if spoken to in an unknown 
language. No action could be designed, still less put 
into execution. Man is what he is because he lives in 
a world of regularity and has the mental power to con- 
ceive the relation of cause and effect. 

Any epistemological speculation must lead toward 
determinism. But the acceptance of determinism raises 
some theoretical difficulties that have seemed to be in- 

1. "La science est deterministe; elle Test a priori; elle postule le 
d&erminisme, paice que sans lui elle ne pouirait &tre." Henri Poin- 
care, Demiires penstes (Paris, Flammarion, 1913), p. 244. 


soluble. While no philosophy has disproved determin- 
ism, there are some ideas that people have not been 
able to bring into agreement with it. Passionate attacks 
have been directed against it because people believed 
that it must ultimately result in absurdity. 

2. The Negation of Ideological Factors 

Many authors have assumed that determinism, fully 
implying consistent materialism, strictly denies that 
mental acts play any role in the course of events. Causa- 
tion, in the context of the doctrine so understood, means 
mechanical causation. All changes are brought about by 
material entities, processes, and events. Ideas are just 
intermediary stages in the process through which a ma- 
terial factor produces a definite material effect. They 
have no autonomous existence. They merely mirror the 
state of the material entities that begot them. There is 
no history of ideas and of actions directed by them, only 
a history of the evolution of the real factors that en- 
gender ideas. 

From the point of view of this integral materialism, 
the only consistent materialist doctrine, the customary 
methods of historians and biographers are to be rejected 
as idealistic nonsense. It is vain to search for the de- 
velopment of certain ideas out of other previously held 
ideas. For example, it is "unscientific" to describe how 
the philosophical ideas of the seventeenth and eight- 
eenth centuries evolved out of those of the sixteenth 
century. "Scientific" history would have to describe how 
out of the real — physical and biological — conditions 


of each age its philosophical tenets necessarily spring. 
It is "unscientific" to describe as a mental process the 
evolution of Saint Augustine's ideas that led him from 
Cicero to Manichaeus and from Manichaeism to Ca- 
tholicism. The "scientific" biographer would have to 
reveal the physiological processes that necessarily re- 
sulted in the corresponding philosophical doctrines. 

The examination of materialism is a task to be left 
to the following chapters. At this point it is enough to 
establish the fact that determinism in itself does not 
imply any concessions to the materialist standpoint. It 
does not negate the obvious truth that ideas have an 
existence of their own, contribute to the emergence of 
other ideas, and influence one another. It does not deny 
mental causation and does not reject history as a meta- 
physical and idealistic illusion. 

3. The Free-WtU Controversy 

Man chooses between modes of action incompatible 
with one another. Such decisions, says the free-will doc- 
trine, are basically undetermined and uncaused; they 
are not the inevitable outcome of antecedent conditions. 
They are rather the display of man's inmost disposition, 
the manifestation of his indelible moral freedom. This 
moral liberty is the essential characteristic of man, rais- 
ing him to a unique position in the universe. 

Determinists reject this doctrine as illusory. Man, 
they say, deceives himself in believing that he chooses. 
Something unknown to the individual directs his will. 
He thinks that he weighs in his mind the pros and cons 


of the alternatives left to his choice and then makes a 
decision. He fails to realize that the antecedent state of 
things enjoins on him a definite line of conduct and that 
there is no means to elude this pressure. Man does not 
act, he is acted upon. 

Both doctrines neglect to pay due attention to the role 
of ideas. The choices a man makes are determined by 
the ideas that he adopts. 

The determinists are right in asserting that every- 
thing that happens is the necessary sequel of the pre- 
ceding state of things. What a man does at any instant 
of his life is entirely dependent on his past, that is, on 
his physiological inheritance as well as of all he went 
through in his previous days. Yet the significance of this 
thesis is considerably weakened by the fact that nothing 
is known about the way in which ideas arise. Deter- 
minism is untenable if based upon or connected with 
the materialist dogma. 1 If advanced without the sup- 
port of materialism, it says little indeed and certainly 
does not sustain the determinists' rejection of the 
methods of history. 

The free-will doctrine is correct in pointing out the 
fundamental difference between human action and ani- 
mal behavior. While the animal cannot help yielding 
to the physiological impulse which prevails at the mo- 
ment, man chooses between alternative modes of con- 
duct. Man has the power to choose even between yield- 
ing to the most imperative instinct, that of self-preserva- 
tion, and the aiming at other ends. All the sarcasms and 
sneers of the positivists cannot annul the fact that ideas 

1. See below, pp. 94-9. 


have a real existence and are genuine factors in shaping 
the course of events. 

The offshoots of human mental efforts, the ideas and 
the judgments of value that direct the individuals' ac- 
tions, cannot be traced back to their causes, and are in 
this sense ultimate data. In dealing with them we refer 
to the concept of individuality. But in resorting to this 
notion we by no means imply that ideas and judgments 
of value spring out of nothing by a sort of spontaneous 
generation and are in no way connected and related to 
what was already in the universe before their appear- 
ance. We merely establish the fact that we do not know 
anything about the mental process which produces 
within a human being the thoughts that respond to the 
state of his physical and ideological environment. 

This cognition is the grain of truth in the free-will 
doctrine. However, the passionate attempts to refute de- 
terminism and to salvage the notion of free will did 
not concern the problem of individuality. They were 
prompted by the practical consequences to which, as 
people believed, determinism inevitably leads: fatalist 
quietism and absolution from moral responsibility. 

4. Foreordination and Fatalism 

As theologians teach, God in his omniscience knows 
in advance all the things that will happen in the uni- 
verse for all time to come. His foresight is unlimited and 
is not merely the result of his knowledge of the laws of 
becoming that determine all events. Even in a universe 
in which there is free will, whatever this may be, his 


precognition is perfect. He anticipates fully and cor- 
rectly all the arbitrary decisions any individual will 
ever make. 

Laplace proudly declared that his system does not 
need to resort to the hypothesis of God's existence. But 
he constructed his own image of a quasi God and called 
it superhuman intelligence. This hypothetical mind 
knows all things and events beforehand, but only be- 
cause it is familiar with all the immutable and eternal 
laws regulating all occurrences, mental as well as phys- 

The idea of God's omniscience has been popularly 
pictured as a book in which all future things are re- 
corded. No deviation from the lines described in this 
register is possible. All things will turn out precisely as 
written in it. What must happen will happen no matter 
what mortal man may undertake to bring about a differ- 
ent result. Hence, consistent fatalism concluded, it is 
useless for man to act. Why bother if everything must 
finally come to a preordained end? 

Fatalism is so contrary to human nature that few peo- 
ple were prepared to draw all the conclusions to which 
it leads and to adjust their conduct accordingly. It is 
a fable that the victories of the Arabian conquerors in 
the first centuries of Islam were due to the fatalist 
teachings of Mohammed. The leaders of the Moslem 
armies which within an unbelievably short time con- 
quered a great part of the Mediterranean area did not 
put a fatalistic confidence in Allah. Rather they believed 
that their God was for the big, well-equipped, and skill- 
fully led battalions. Other reasons than blind trust in 


fate account for the courage of the Saracen warriors; 
and the Christians in the forces of Charles Martel and 
Leo the Isaurian who stopped their advance were no 
less courageous than the Moslems although fatalism had 
no hold on their minds. Nor was the lethargy which 
spread later among the Islamitic peoples caused by the 
fatalism of their religion. It was despotism that para- 
lyzed the initiative of the subjects. The harsh tyrants 
who oppressed the masses were certainly not lethargic 
and apathetic. They were indefatigable in their quest 
for power, riches, and pleasures. 

Soothsayers have claimed to have reliable knowledge 
of some pages at least of the great book in which all 
coming events are recorded. But none of these prophets 
was consistent enough to reject activism and to advise 
his disciples to wait quietly for the day of fulfillment. 

The best illustration is provided by Marxism. It 
teaches perfect foreordination, yet still aims to inflame 
people with revolutionary spirit. What is the use of 
revolutionary action if events must inevitably turn out 
according to a preordained plan, whatever men may 
do? Why are the Marxians so busy organizing socialist 
parties and sabotaging the operation of the market 
economy if socialism is bound to come anyway "with 
the inexorability of a law of nature"? It is a lame excuse 
indeed to declare that the task of a socialist party is not 
to bring about socialism but merely to provide obstet- 
rical assistance at its birth. The obstetrician too diverts 
the course of events from the way they would run with- 
out his intervention. Otherwise expectant mothers 
would not request his aid. Yet the essential teaching of 


Marxian dialectic materialism precludes the assumption 
that any political or ideological fact could influence the 
course of historical events, since the latter are sub- 
stantially determined by the evolution of the material 
productive forces. What brings about socialism is the 
"operation of the immanent laws of capitalistic produc- 
tion itself." 1 Ideas, political parties, and revolutionary 
actions are merely superstructural; they can neither de- 
lay nor accelerate the march of history. Socialism will 
come when the material conditions for its appearance 
have matured in the womb of capitalist society, neither 
sooner nor later. 2 If Marx had been consistent, he would 
not have embarked upon any political activity. 3 He 
would have quietly waited for the day on which the 
"knell of private capitalist property sounds." * 

In dealing with fatalism we may ignore the claims of 
soothsayers. Determinism has nothing at all to do with 
the art of fortune tellers, crystal gazers, and astrologers 
or with the more pretentious effusions of the authors of 
"philosophies of history." It does not predict future 
events. It asserts that there is regularity in the universe 
in the concatenation of all phenomena. 

Those theologians who thought that in order to refute 
fatalism they must adopt the free-will doctrine were 

1. Marx, Das Kapital (7th ed. Hamburg, 1914), 1, 728. 

2. Cf. below pp. 107 and 128. 

3. Neither would he have written the often quoted eleventh aphor- 
ism on Feuerbach: "The philosophers have only provided different 
interpretations of the world, but what matters is to change it." Ac- 
cording to the teachings of dialectical materialism only the evolu- 
tion of the material productive forces, not the philosophers, can 
change the world. 

4. Marx, Das Kapital, as quoted above. 


badly mistaken. They had a very defective image of 
God's omniscience. Their God would know only what 
is in perfect textbooks of the natural sciences; he would 
not know what is going on in human minds. He would 
not anticipate that some people might endorse the doc- 
trine of fatalism and, sitting with clasped hands, in- 
dolently await the events which God, erroneously as- 
suming that they would not indulge in inactivity, had 
meted out to them. 

5. Determinism and Penology 

A factor that often entered the controversies concern- 
ing determinism was misapprehension as to its practical 

All nonutilitarian systems of ethics look upon the 
moral law as something outside the nexus of means and 
ends. The moral code has no reference to human well- 
being and happiness, to expediency, and to the mun- 
dane striving after ends. It is heteronomous, i.e., en- 
joined upon man by an agency that does not depend on 
human ideas and does not bother about human con- 
cerns. Some believe that this agency is God, others that 
it is the wisdom of the forefathers, some that it is a 
mystical inner voice alive in every decent man's con- 
science. He who violates the precepts of this code com- 
mits a sin, and his guilt makes him liable to punishment. 
Punishment does not serve human ends. In punishing 
offenders, the secular or theocratic authorities acquit 
themselves of a duty entrusted to them by the moral 
code and its author. They are bound to punish sin and 


guilt whatever the consequences of their action may be. 

Now these metaphysical notions of guilt, sin, and 
retribution are incompatible with the doctrine of de- 
terminism. If all human actions are the inevitable effect 
of their causes, if the individual cannot help acting in 
the way antecedent conditions make him act, there 
can no longer be any question of guilt. What a haughty 
presumption to punish a man who simply did what the 
eternal laws of the universe had determined! 

The philosophers and lawyers who attacked deter- 
minism on these grounds failed to see that the doctrine 
of an almighty and omniscient God led to the same con- 
clusions that moved them to reject philosophical deter- 
minism. If God is almighty, nothing can happen that 
he does not want to happen. If he is omniscient, he 
knows in advance all things that will happen. In either 
case, man cannot be considered answerable. 1 The young 
Benjamin Franklin argued "from the supposed attri- 
butes of God" in this manner: "That in erecting and 
governing the world, as he was infinitely wise, he knew 
what would be best; infinitely good, he must be dis- 
posed; and infinitely powerful, he must be able to exe- 
cute it. Consequently all is right." * In fact, all attempts 

1. See Fritz Mauthner, Worterbuch der Phttosophie (2d ed. Leip- 
zig. 1923), 1. 462-7. 

2. Benjamin Franklin, Autobiography (New York, A. L. Burt, n.d.), 
pp. 73-4. Franklin very soo» gave up this reasoning. He declared: 
"The great uncertainty I found in metaphysical reasonings disgusted 
me, and I quitted that kind of reading and study for others more satis- 
factory." In the posthumous papers of Franz Brentano a rather un- 
convincing refutation of Franklin's flash of thought was found. It was 
published by Oskar Kraus in his edition of Brentano's Voro Ur sprung 
sUtlicher Erkenntnit (Leipzig, 1921), pp. 91-5. 


to justify, on metaphysical and theological grounds, so- 
ciety's right to punish those whose actions jeopardize 
peaceful social cooperation are open to the same criti- 
cism that is leveled against philosophical determinism. 
Utilitarian ethics approaches the problem of punish- 
ment from a different angle. The offender is not pun- 
ished because he is bad and deserves chastisement but 
so that neither he nor other people will repeat the of- 
fense. Punishment is not inflicted as retribution and 
retaliation but as a means to prevent future crimes. 
Legislators and judges are not the mandataries of a 
metaphysical retributive justice. They are committed to 
the task of safeguarding the smooth operation of so- 
ciety against encroachments on the part of antisocial 
individuals. Hence it is possible to deal with the prob- 
lem of determinism without being troubled by inane 
considerations of practical consequences concerning 
the penal code. 

6. Determinism and Statistics 

In the nineteenth century some thinkers maintained 
that statistics have irrefutably demolished the doctrine 
of free will. It was argued that statistics show a regular- 
ity in the occurrence of certain human acts, e.g., crimes 
and suicides; and this alleged regularity was inter- 
preted by Adolphe Quetelet and by Thomas Henry 
Buckle as an empirical demonstration of the correctness 
of rigid determinism. 

However, what the statistics of human actions really 
show is not regularity but irregularity. The number 


of crimes, suicides, and acts of forgetfulness — which 
play such a conspicuous role in Buckle's deductions — 
varies from year to year. These yearly changes are as a 
rule small, and over a period of years they often — but 
not always— show a definite trend toward either in- 
crease or decrease. These statistics are indicative of his- 
torical change, not of regularity in the sense which is 
attached to this term in the natural sciences. 

The specific understanding of history can try to in- 
terpret the why of such changes effected in the past and 
to anticipate changes likely to happen in the future. In 
doing this it deals with judgments of value determining 
the choice of ultimate ends, with reasoning and knowl- 
edge determining the choice of means, and with thy- 
mological traits of individuals. 1 It must, sooner or later, 
but inevitably, reach a point at which it can only refer 
to individuality. From beginning to end the treatment 
of the problems involved is bound to follow the lines of 
every scrutiny of human affairs; it must be teleological 
and as such radically different from the methods of the 
natural sciences. 

But Buckle, blinded by the positivist bigotry of his 
environment, was quick to formulate his law: "In a 
given state of society a certain number of persons must 
put an end to their own life. This is the general law; 
and the special question as to who shall commit the 
crime depends of course upon special laws; which, how- 
ever, in their total action must obey the large social 
law to which they are all subordinate. And the power of 
the larger law is so irresistible that neither the love of 

1. On thymology see pp. 264 S. 


life nor the fear of another world can avail anything 
towards even checking its operation." 2 Buckle's law 
seems to be very definite and unambiguous in its formu- 
lation. But in fact it defeats itself entirely by including 
the phrase "a given state of society," which even an 
enthusiastic admirer of Buckle termed "viciously 
vague."* As Buckle does not provide us with criteria 
for determining changes in the state of society, his 
formulation can be neither verified nor disproved by ex- 
perience and thus lacks the distinctive mark of a law 
of the natural sciences. 

Many years after Buckle, eminent physicists began 
to assume that certain or even all laws of mechanics 
may be "only" statistical in character. This doctrine 
was considered incompatible with determinism and 
causality. When later on quantum mechanics consider- 
ably enlarged the scope of "merely" statistical physics, 
many writers cast away all the epistemological prin- 
ciples that had guided the natural sciences for cen- 
turies. On the macroscopic scale, they say, we observe 
certain regularities which older generations erroneously 
interpreted as a manifestation of natural law. In fact, 
these regularities are the result of the statistical com- 
pensation of contingent events. The apparent causal 
arrangement on a large scale is to be explained by the 
law of large numbers. 4 

2. Buckle, Introduction to the History of Civilization in England, 
J. M. Robertson, ed. (London, G. Routledge; New York, E. P. Dut- 
ton, n.d.), ch. 1 in I, 15-16. 

3. J. M. Robertson, Buckle and His Critic* (London, 1895), p. 288. 

4. John von Neumann, Mathematische Grundlagen der Quanten- 
mechanik (New York, 1943), pp. 172 ff. 


Now the law of large numbers and statistical com- 
pensation is operative only in fields in which there pre- 
vail large-scale regularity and homogeneity of such a 
character that they offset any irregularity and hetero- 
geneity that may seem to exist on the small-scale level. 
If one assumes that seemingly contingent events always 
compensate one another in such a way that a regularity 
appears in the repeated observation of large numbers 
of these events, one implies that these events follow a 
definite pattern and can therefore no longer be con- 
sidered as contingent. What we mean in speaking of 
natural law is that there is a regularity in the concatena- 
tion and sequence of phenomena. If a set of events on 
the microscopic scale always produces a definite event 
on the macroscopic scale, such a regularity is present. 
If there were no regularity in the microscopic scale, no 
regularity could emerge on the macroscopic scale 

Quantum mechanics deals with the fact that we do 
not know how an atom will behave in an individual in- 
stance. But we know what patterns of behavior can 
possibly occur and the proportion in which these pat- 
terns really occur. While the perfect form of a causal 
law is: A "produces" B, there is also a less perfect form: 
A "produces" C in n% of all cases, D in m% of all cases, 
and so on. Perhaps it will at a later day be possible to 
dissolve this A of the less perfect form into a number of 
disparate elements to each of which a definite "effect" 
will be assigned according to the perfect form. But 
whether this will happen or not is of no relevance for 
the problem of determinism. The imperfect law too is a 


causal law, although it discloses shortcomings in our 
knowledge. And because it is a display of a peculiar 
type both of knowledge and of ignorance, it opens a 
field for the employment of the calculus of probability. 
We know, with regard to a definite problem, all about 
the behavior of the whole class of events, we know that 
class A will produce definite effects in a known propor- 
tion; but all we know about the individual A's is that 
they are members of the A class. The mathematical 
formulation of this mixture of knowledge and ignorance 
is: We know the probability of the various effects that 
can possibly be "produced" by an individual A. 

What the neo-indeterminist school of physics fails to 
see is that the proposition: A produces B in n% of the 
cases and C in the rest of the cases is, epistemologically, 
not different from the proposition: A always produces 
B. The former proposition differs from the latter only in 
combining in its notion of A two elements, X and Y, 
which the perfect form of a causal law would have to 
distinguish. But no question of contingency is raised. 
Quantum mechanics does not say: The individual atoms 
behave like customers choosing dishes in a restaurant 
or voters casting their ballots. It says: The atoms in- 
variably follow a definite pattern. This is also mani- 
fested in the fact that what it predicates about atoms 
contains no reference either to a definite period of time 
or to a definite location within the universe. One could 
not deal with the behavior of atoms in general, that is, 
without reference to time and space, if the individual 
atom were not inevitably and fully ruled by natural law. 
We are free to use the term "individual" atom, but we 


must never ascribe to an "individual" atom individuality 
in the sense in which this term is applied to men and to 
historical events. 

In the field of human action the determinist philos- 
ophers referred to statistics in order to refute the doc- 
trine of free will and to prove determinism in the acts of 
man. In the field of physics the neo-indeterminist philos- 
ophers refer to statistics in order to refute the doctrine 
of determinism and to prove indeterminism in nature. 
The error of both sides arises from confusion as to the 
meaning of statistics. 

In the field of human action statistics is a method of 
historical research. It is a description in numerical terms 
of historical events that happened in a definite period 
of time with definite groups of people in a definite geo- 
graphical area. Its meaning consists precisely in the 
fact that it describes changes, not something unchang- 

In the field of nature statistics is a method of induc- 
tive research. Its epistemological justification and its 
meaning lie in the firm belief that there are regularity 
and perfect determinism in nature. The laws of nature 
are considered perennial. They are fully operative in 
each instance. What happens in one case must also 
happen in all other like cases. Therefore the information 
conveyed by statistical material has general validity 
with regard to the classes of phenomena to which it 
refers; it does not concern only definite periods of his- 
tory and definite geographical sites. 

Unfortunately the two entirely different categories 
of statistics have been confused. And the matter has 


been still further tangled by jumbling it together with 
the notion of probability. 

To unravel this imbroglio of errors, misunderstanding, 
and contradictions let us emphasize some truisms. 

It is impossible, as has been pointed out above, for 
the human mind to think of any event as uncaused. The 
concepts of chance and contingency, if properly ana- 
lyzed, do not refer ultimately to the course of events in 
the universe. They refer to human knowledge, pre- 
vision, and action. They have a praxeological, not an 
ontological connotation. 

Calling an event contingent is not to deny that it is 
the necessary outcome of the preceding state of affairs. 
It means that we mortal men do not know whether or 
not it will happen. 

Our notion of nature refers to an ascertainable, per- 
manent regularity in the concatenation and sequence 
of phenomena. Whatever happens in nature and can be 
conceived by the natural sciences is the outcome of the 
operation, repeated and repeated again, of the same 
laws. Natural science means the cognition of these laws. 
The historical sciences of human action, on the other 
hand, deal with events which our mental faculties can- 
not interpret as a manifestation of a general law. They 
deal with individual men and individual events even in 
dealing with the affairs of masses, peoples, races, and 
the whole of mankind. They deal with individuality and 
with an irreversible flux of events. If the natural sciences 
scrutinize an event that happened but once, such as a 
geological change or the biological evolution of a 
species, they look upon it as an instance of the operation 


of general laws. But history is not in a position to trace 
events back to the operation of perennial laws. There- 
fore in dealing with an event it is primarily interested 
not in the features such an event may have in common 
with other events but in its individual characteristics. 
In dealing with the assassination of Caesar history does 
not study murder but the murder of the man Caesar. 

The very notion of a natural law whose validity is re- 
stricted to a definite period of time is self -contradictory. 
Experience, whether that of mundane observation as 
made in daily life or that of deliberately prearranged 
experiments, refers to individual historical cases. But the 
natural sciences, guided by their indispensable aprior- 
istic determinism, assume that the law must manifest 
itself in every individual case, and generalize by what 
is called inductive inference. 

The present epistemological situation in the field of 
quantum mechanics would be correctly described by the 
statement: We know the various patterns according to 
which atoms behave and we know the proportion in 
which each of these patterns becomes actual. This 
would describe the state of our knowledge as an instance 
of class probability: We know all about the behavior of 
the whole class; about the behavior of the individual 
members of the class we know only that they are mem- 
bers. 8 It is inexpedient and misleading to apply to the 
problems concerned terms used in dealing with human 
action. Bertrand Russell resorts to such figurative 
speech: the atom "will do" something, there is "a 

5. On the distinction between class probability and case probabil- 
ity, see Mises, Human Action, pp. 107-13. 


definite set of alternatives open to it, and it chooses 
sometimes one, sometimes another." 9 The reason Lord 
Russell chooses such inappropriate terms becomes ob- 
vious if we take into account the tendency of his book 
and of all his other writings. He wants to obliterate the 
difference between acting man and human action on 
the one hand and nonhuman events on the other hand. 
In his eyes "the difference between us and a stone is 
only one of degree"; for "we react to stimuli, and so do 
stones, though the stimuli to which they react are 
fewer." 7 Lord Russell omits to mention the fundamental 
difference in the way stones and men "react." Stones 
react according to a perennial pattern, which we call a 
law of nature. Men do not react in such a uniform way; 
they behave, as both praxeologists and historians say, 
in an individual way. Nobody has ever succeeded in 
assigning various men to classes each member of which 
behaves according to the same pattern. 

7. The Autonomy of the Sciences of Human Action 

The phraseology employed in the old antagonism of 
determinism and indeterminism is inappropriate. It does 
not correctly describe the substance of the controversy. 

The search for knowledge is always concerned with 
the concatenation of events and the cognition of the 
factors producing change. In this sense both the natural 
sciences and the sciences of human action are com- 
mitted to the category of causality and to determinism. 

6. Bertrand Russell, Religion and Science, Home University Li- 
brary (London, Oxford University Press, 1936), pp. 152-8. 

7. Ibid., p. 131. 


No action can ever succeed if not guided by a true — 
in the sense of pragmatism — insight into what is com- 
monly called a relation of cause and effect. The funda- 
mental category of action, viz., means and ends, pre- 
supposes the category of cause and effect. 

What the sciences of human action must reject is not 
determinism but the positivistic and panphysicalistic 
distortion of determinism. They stress the fact that 
ideas determine human action and that at least in the 
present state of human science it is impossible to reduce 
the emergence and the transformation of ideas to phys- 
ical, chemical, or biological factors. It is this impossibil- 
ity that constitutes the autonomy of the sciences of hu- 
man action. Perhaps natural science will one day be in 
a position to describe the physical, chemical, and bi- 
ological events which in the body of the man Newton 
necessarily and inevitably produced the theory of gravi- 
tation. In the meantime, we must be content with the 
study of the history of ideas as a part of the sciences of 
human action. 

The sciences of human action by no means reject de- 
terminism. The objective of history is to bring out in 
full relief the factors that were operative in producing 
a definite event. History is entirely guided by the cate- 
gory of cause and effect. In retrospect, there is no ques- 
tion of contingency. The notion of contingency as em- 
ployed in dealing with human action always refers to 
man's uncertainty about the future and the limitations 
of the specific historical understanding of future events. 
It refers to a limitation of the human search for knowl- 
edge, not to a condition of the universe or of some of 
its parts. 

Chapter 6. Materialism 

1. Two Varieties of Materialism 

The term "materialism" as applied in contemporary 
speech has two entirely different connotations. 

The first connotation refers to values. It characterizes 
the mentality of people who desire only material 
wealth, bodily satisfactions, and sensuous pleasures. 

The second connotation is ontological. It signifies the 
doctrine that all human thoughts, ideas, judgments of 
value, and volitions are the product of physical, chem- 
ical, and physiological processes going on in the human 
body. Consequently materialism in this sense denies the 
meaningfulness of thymology and the sciences of hu- 
man action, of praxeology as well as of history; the 
natural sciences alone are scientific. We shall deal in 
this chapter only with this second connotation. 

The materialist thesis has never yet been proved or 
particularized. The materialists have brought forward 
no more than analogies and metaphors. They have com- 
pared the working of the human mind with the opera- 
tion of a machine or with physiological processes. Both 
analogies are insignificant and do not explain anything. 

A machine is a device made by man. It is the realiza- 
tion of a design and it runs precisely according to the 
plan of its authors. What produces the product of its 
operation is not something within it but the purpose 



the constructor wanted to realize by means of its con- 
struction. It is the constructor and the operator who 
create the product, not the machine. To ascribe to a 
machine any activity is anthropomorphism and animism. 
The machine has no control over its running. It does not 
move; it is put into motion and kept in motion by men. 
It is a dead tool which is employed by men and comes to 
a standstill as soon as the effects of the operator's im- 
pulse cease. What the materialist who resorts to the 
machine metaphor would have to explain first of all is: 
Who constructed this human machine and who oper- 
ates it? In whose hands does it serve as a tool? It is dif- 
ficult to see how any other answer could be given to this 
question than: It is the Creator. 

It is customary to call an automatic contrivance self- 
acting. This idiom too is a metaphor. It is not the cal- 
culating machine that calculates, but the operator by 
means of a tool ingeniously devised by an inventor. The 
machine has no intelligence; it neither thinks nor 
chooses ends nor resorts to means for the realization of 
the ends sought. This is always done by men. 

The physiological analogy is more sensible than the 
mechanistic analogy. Thinking is inseparably tied up 
with a physiological process. As far as the physiological 
thesis merely stresses this fact, it is not metaphorical; 
but it says very little. For the problem is precisely this, 
that we do not know anything about the physiological 
phenomena constituting the process that produces 
poems, theories, and plans. Pathology provides abun- 
dant information about the impairment or total annihila- 
tion of mental faculties resulting from injuries of the 


brain. Anatomy provides no less abundant information 
about the chemical structure of the brain cells and 
their physiological behavior. But notwithstanding the 
advance in physiological knowledge, we do not know 
more about the mind-body problem than the old philos- 
ophers who first began to ponder it. None of the doc- 
trines they advanced has been either proved or dis- 
proved by newly won physiological knowledge. 

Thoughts and ideas are not phantoms. They are real 
things. Although intangible and immaterial, they are 
factors in bringing about changes in the realm of 
tangible and material things. They are generated by 
some unknown process going on in a human being's 
body and can be perceived only by the same kind of 
process going on in the body of their author or in other 
human beings' bodies. They can be called creative and 
original insofar as the impulse they give and the changes 
they bring about depend on their emergence. We can 
ascertain what we wish to about the life of an idea and 
the effects of its existence. About its birth we know only 
that it was engendered by an individual. We cannot 
trace its history further back. The emergence of an idea 
is an innovation, a new fact added to the world. It is, 
because of the deficiency of our knowledge, for human 
minds the origin of something new that did not exist be- 

What a satisfactory materialist doctrine would have 
to describe is the sequence of events going on in matter 
that produces a definite idea. It would have to explain 
why people agree or disagree with regard to definite 
problems. It would have to explain why one man sue- 


ceeded in solving a problem which other people failed 
to solve. But no materialistic doctrine has up to now 
tried to do this. 

The champions of materialism are intent upon point- 
ing out the untenability of all other doctrines that have 
been advanced for the solution of the mind-body prob- 
lem. They are especially zealous in fighting the the- 
ological interpretation. Yet the refutation of a doctrine 
does not prove the soundness of any other doctrine at 
variance with it. 

Perhaps it is too bold a venture for the human mind 
to speculate about its own nature and origin. It may be 
true, as agnosticism maintains, that knowledge about 
these problems is forever denied to mortal men. But 
even if this is so, it does not justify the logical positivists* 
condemning the questions implied as meaningless and 
nonsensical. A question is not nonsensical merely be- 
cause it cannot be answered satisfactorily by the human 

2. The Secretion Analogy 

A notorious formulation of the materialist thesis 
states that thoughts stand in about the same relation to 
the brain as the gall to the liver or urine to the kidneys. 1 
As a rule materialist authors are more cautious in their 
utterances. But essentially all they say is tantamount 
to this challenging dictum. 

Physiology distinguishes between urine of a chem- 

1. C. Vogt, Kohlerglaube und Wisseruchaft (2d ed. Giessen, 1855), 
p. 32. 


ically normal composition and other types of urine. De- 
viation from the normal composition is accounted for by 
certain deviations in the body's physique or in the func- 
tioning of the body's organs from what is considered 
normal and healthy. These deviations too follow a regu- 
lar pattern. A definite abnormal or pathological state 
of the body is reflected in a corresponding alteration of 
the urine's chemical composition. The assimilation of 
certain f oodstuffs, beverages, and drugs brings about re- 
lated phenomena in the urine's composition. With hale 
people, those commonly called normal, urine is, within 
certain narrow margins, of the same chemical nature. 

It is different with thoughts and ideas. With them 
there is no question of normalcy or of deviations from 
normalcy following a definite pattern. Certain bodily 
injuries or the assimilation of certain drugs and bever- 
ages obstruct and trouble the mind's faculty to think. 
But even these derangements are not uniform with 
various people. Different people have different ideas, 
and no materialist ever succeeded in tracing back these 
differences to factors that could be described in terms of 
physics, chemistry, or physiology. Any reference to the 
natural sciences and to material factors they are dealing 
with is vain when we ask why some people vote the Re- 
publican and others the Democratic ticket. 

Up to now at least the natural sciences have not suc- 
ceeded in discovering any bodily or material traits to 
whose presence or absence the content of ideas and 
thoughts can be imputed. In fact, the problem of the 
diversity of the content of ideas and thoughts does not 
even arise in the natural sciences. They can deal only 


with objects that affect or modify sensuous intuition. 
But ideas and thoughts do not directly affect sensation. 
What characterizes them is meaning — and for the cogni- 
tion of meaning the methods of the natural sciences are 

Ideas influence one another, they provide stimulation 
for the emergence of new ideas, they supersede or trans- 
form other ideas. All that materialism could offer for the 
treatment of these phenomena is a metaphorical refer- 
ence to the notion of contagion. The comparison is 
superficial and does not explain anything. Diseases are 
communicated from body to body through the migra- 
tions of germs and viruses. Nobody knows anything 
about the migration of a factor that would transmit 
thoughts from man to man. 

3. The Political Implications of Materialism 

Materialism originated as a reaction against a pri- 
meval dualistic interpretation of man's being and es- 
sential nature. In the light of these beliefs, living man 
was a compound of two separable parts: a mortal body 
and an immortal soul. Death severed these two parts. 
The soul moved out of sight of the living and continued 
a shadow-like existence beyond the reach of earthly 
powers in the realm of the deceased. In exceptional 
cases it was permitted to a soul to reappear for a while 
in the sensible world of the living or for a still living 
man to pay a short visit to the fields of the dead. 

These rather crude representations have been sub- 
limated by religious doctrines and by idealistic philos- 


ophy. While the primitive descriptions of a realm of 
souls and the activities of its inhabitants cannot bear 
critical examination and can easily be exposed to ridi- 
cule, it is impossible both for aprioristic reasoning and 
for the natural sciences to refute cogently the refined 
tenets of religious creeds. History can explode many of 
the historical narrations of theological literature. But 
higher criticism does not affect the core of the faith. Rea- 
son can neither prove nor disprove the essential religious 

But materialism as it had developed in eighteenth- 
century France was not merely a scientific doctrine. It 
was also a part of the vocabulary of the reformers who 
fought the abuses of the ancien regime. The prelates of 
the Church in royal France were with few exceptions 
members of the aristocracy. Most of them were more 
interested in court intrigues than in the performance 
of their ecclesiastical duties. Their well-deserved un- 
popularity made antireligious tendencies popular. 

The debates on materialism would have subsided 
about the middle of the nineteenth century if no polit- 
ical issues had been involved. People would have real- 
ized that contemporary science has not contributed any- 
thing to the elucidation or analysis of the physiological 
processes that generate definite ideas and that it is 
doubtful whether future scientists will succeed better 
in this task. The materialist dogma would have been re- 
garded as a conjecture about a problem whose satis- 
factory solution seemed, at least for the time being, 
beyond the reach of man's search for knowledge. Its 
supporters would no longer have been in a position to 


consider it an irrefutable scientific truth and would not 
have been permitted to accuse its critics of obscur- 
antism, ignorance, and superstition. Agnosticism would 
have replaced materialism. 

But in most of the European and Latin American 
countries Christian churches cooperated, at least to 
some extent, with the forces that opposed representative 
government and all institutions making for freedom. In 
these countries one could hardly avoid attacking re- 
ligion if one aimed at the realization of a program that 
by and large corresponded with the ideals of Jefferson 
and of Lincoln. The political implications of the ma- 
terialism controversy prevented its fading away. 
Prompted not by epistemological, philosophical, or sci- 
entific considerations but by purely political reasons, 
a desperate attempt was made to salvage the politically 
very convenient slogan "materialism." While the type 
of materialism that flourished until the middle of the 
nineteenth century receded into the background, gave 
way to agnosticism, and could not be regenerated by 
such rather crude and naive writings as those of 
Haeckel, a new type was developed by Karl Marx under 
the name of dialectical materialism. 

Chapter 7. Dialectical Materialism 

1. Dialectics and Marxism 

Dialectical materialism as taught by Karl Marx 
and Frederick Engels is the most popular metaphysical 
doctrine of our age. It is today the official philosophy 
of the Soviet empire and of all the schools of Marxism 
outside of this empire. It dominates the ideas of many 
people who do not consider themselves Marxians and 
even of many authors and parties who believe they are 
anti-Marxians and anti-communists. It is this doctrine 
which most of our contemporaries have in mind when 
they refer to materialism and determinism. 

When Marx was a young man, two metaphysical doc- 
trines whose teachings were incompatible with one an- 
other dominated German thought. One was Hegelian 
spiritualism, the official doctrine of the Prussian state 
and of the Prussian universities. The other was material- 
ism, the doctrine of the opposition bent upon a revolu- 
tionary overthrow of the political system of Metternich 
and of Christian orthodoxy as well as of private prop- 
erty. Marx tried to blend the two into a compound in 
order to prove that socialism is bound to come "with the 
inexorability of a law of nature." 

In the philosophy of Hegel logic, metaphysics, and 
ontology are essentially identical. The process of real 



becoming is an aspect of the logical process of thinking. 
In grasping the laws of logic by aprioristic thinking, the 
mind acquires correct knowledge of reality. There is 
no road to truth but that provided by the study of logic. 

The peculiar principle of Hegel's logic is the dialectic 
method. Thinking takes a triadic way. It proceeds from 
thesis to antithesis, i.e., the negation of the thesis, and 
from antithesis to synthesis, i.e., the negation of the 
negation. The same trinal principle of thesis, antithesis, 
and synthesis manifests itself in real becoming. For the 
only real thing in the universe is Geist (mind or spirit). 
Matter has its substance not in itself. Natural things are 
not for themselves (fiir sich selber). But Geist is for 
itself. What — apart from reason and divine action — is 
called reality is, viewed in the light of philosophy, some- 
thing rotten or inert (ein Faules) which may seem but 
is not in itself real. 1 

No compromise is possible between this Hegelian 
idealism and any kind of materialism. Yet, fascinated 
by the prestige Hegelianism enjoyed in the Germany of 
the 1840's, Marx and Engels were afraid to deviate too 
radically from the only philosophical system with which 
they and their contemporary countrymen were familiar. 
They were not audacious enough to discard Hegelian- 
ism entirely as was done a few years later even in Prus- 
sia. They preferred to appear as continuators and re- 
formers of Hegel, not as iconoclastic dissenters. They 
boasted of having transformed and improved Hegelian 
dialectics, of having turned it upside down, or rather, 

1. See Hegel, Vorlenmgen liber die Philosophic der Weltge- 
schichte, ed. Lasson (Leipzig, 1917), pp. 31-4, 55. 


of having put it on its feet. 2 They did not realize that 
it was nonsensical to uproot dialectics from its idealistic 
ground and transplant it to a system that was labeled 
materialistic and empirical. Hegel was consistent in 
assuming that the logical process is faithfully reflected 
in the processes going on in what is commonly called 
reality. He did not contradict himself in applying the 
logical apriori to the interpretation of the universe. But 
it is different with a doctrine that indulges in a naive 
realism, materialism, and empiricism. Such a doctrine 
ought to have no use for a scheme of interpretation that 
is derived not from experience but from apriori reason- 
ing. Engels declared that dialectics is the science of the 
general laws of motion, of the external world as well as 
of human thinking; two series of laws which are sub- 
stantially identical but in their manifestation different 
insofar as the human mind can apply them consciously, 
while in nature, and hitherto also to a great extent in 
human history, they assert themselves in an uncon- 
scious way as external necessity in the midst of an in- 
finite series of apparently contingent events. 3 He him- 
self, says Engels, had never had any doubts about this. 
His intensive preoccupation with mathematics and the 
natural sciences, to which he confesses to have devoted 
the greater part of eight years, was, he declares, obvi- 
ously prompted only by the desire to test the validity 
of the laws of dialectics in detail in specific instances. 4 

2. Engels, Ludwig Feuerbach und der Ausgang der fdassischen 
deutschen Philosophie (5th ed. Stuttgart, 1910), pp. 36-9. 

3. Ibid., p. 38. 

4. Preface, Engels, Herm Eugen Diihrings Umwdlzung der Wissen- 
schaft (7th ed. Stuttgart, 1910), pp. xiv and xv. 


These studies led Engels to startling discoveries. Thus 
he found that "the whole of geology is a series of ne- 
gated negations." Butterflies "come into existence from 
the egg through negation of the egg . . . they are ne- 
gated again as they die," and so on. The normal life of 
barley is this: "The barleycorn ... is negated and is 
supplanted by the barley plant, the negation of the 
corn. . . . The plant grows ... is fructified and pro- 
duces again barleycorns and as soon as these are ripe, 
the ear withers away, is negated. As a result of this ne- 
gation of the negation we have again the original bar- 
leycorn, however not plainly single but in a quantity 
ten, twenty, or thirty times larger." B 

It did not occur to Engels that he was merely playing 
with words. It is a gratuitous pastime to apply the 
terminology of logic to the phenomena of reality. Propo- 
sitions about phenomena, events, and facts can be af- 
firmed or negated, but not the phenomena, events, and 
facts themselves. But if one is committed to such inap- 
propriate and logically vicious metaphorical language, 
it is not less sensible to call the butterfly the affirmation 
of the egg than to call it its negation. Is not the emer- 
gence of the butterfly the self-assertion of the egg, the 
maturing of its inherent purpose, the perfection of its 
merely passing existence, the fulfillment of all its po- 
tentialities? Engels' method consisted in substituting 
the term "negation" for the term "change." There is, 
however, no need to dwell longer upon the fallacy of 
integrating Hegelian dialectics into a philosophy that 
does not endorse Hegel's fundamental principle, the 

5. Ibid., pp. 138-9. 


identity of logic and ontology, and does not radically 
reject the idea that anything could be learned from ex- 
perience. For in fact dialectics plays a merely orna- 
mental part in the constructions of Marx and Engels 
without substantially influencing the course of reason- 
ing. 8 

2. The Material Productive Forces 

The essential concept of Marxian materialism is "the 
material productive forces of society." These forces are 
the driving power producing all historical facts and 
changes. In the social production of their subsistence, 
men enter into certain relations — production relations 
— which are necessary and independent of their will 
and correspond to the prevailing stage of development 
of the material productive forces. The totality of these 
production relations forms "the economic structure of 
society, the real basis upon which there arises a juridical 
and political superstructure and to which definite forms 
of social consciousness correspond." The mode of pro- 
duction of material life conditions the social, political, 
and spiritual (intellectual) life process in general (in 
each of its manifestations). It is not the consciousness 
(the ideas and thoughts) of men that determines their 
being (existence) but, on the contrary, their social 
being that determines their consciousness. At a certain 
stage of their development the material productive 
forces of society come into contradiction with the exist- 

6. E. Hammacher, Das philosophisch-dkonomische System des 
Marxismus (Leipzig, 1909), pp. 506-11. 


ing production relations, or, what is merely a juridical 
expression for them, with the property relations (the 
social system of property laws) within the frame of 
which they have hitherto operated. From having been 
forms of development of the productive forces these re- 
lations turn into fetters of them. Then comes an epoch 
of social revolution. With the change in the economic 
foundation the whole immense superstructure slowly or 
rapidly transforms * itself. In reviewing such a trans- 
formation, 1 one must always distinguish between the 
material transformation l of the economic conditions of 
production, which can be precisely ascertained with the 
methods of the natural sciences, and the juridical, po- 
litical, religious, artistic, 2 or philosophical, in short ide- 
ological, forms in which men become conscious (aware) 
of this conflict and fight it out. Such an epoch of trans- 
formation can no more be judged according to its own 
consciousness than an individual can be judged accord- 
ing to what he imagines himself to be; one must rather 
explain this consciousness out of the contradictions of 
the material life, out of the existing conflict between so- 
cial productive forces and production relations. No so- 
cial formation ever disappears before all the productive 
forces have been developed for which its frame is broad 
enough, and new, higher production relations never ap- 
pear before the material conditions of their existence 
have been hatched out in the womb of the old society. 

1. The term used by Marx, umwalzen, UmwiUzung, is the German- 
language equivalent of "revolution." 

2. The German term Kuntt includes all branches of poetry, fiction, 
and playwriting. 


Hence mankind never sets itself tasks other than those it 
can solve, for closer observation will always discover 
that the task itself only emerges where the material con- 
ditions of its solution are already present or at least in 
the process of becoming. 3 

The most remarkable fact about this doctrine is that 
it does not provide a definition of its basic concept, ma- 
terial productive forces. Marx never told us what he had 
in mind in referring to the material productive forces. 
We have to deduce it from occasional historical exem- 
plifications of his doctrine. The most outspoken of these 
incidental examples is to be found in his book, The Pov- 
erty of Philosophy, published in 1847 in French. It 
reads: The hand mill gives you feudal society, the steam 
mill industrial capitalism. 4 This means that the state of 
practical technological knowledge or the technological 
quality of the tools and machines used in production is 
to be considered the essential feature of the material 
productive forces, which uniquely determine the pro- 
duction relations and thereby the whole "superstruc- 
ture." The production technique is the real thing, the 
material being that ultimately determines the social, 
political, and intellectual manifestations of human life. 
This interpretation is fully confirmed by all other ex- 
amples provided by Marx and Engels and by the re- 
sponse every new technological advance roused in their 
minds. They welcomed it enthusiastically because they 

3. K. Marx, Zur Kritik der politischen Oekonomie, ed. Kautsky 
(Stuttgart, 1897), Preface, pp. x-xii. 

4. "Lie moulin a bras vous donnera la society avec le souzerain; le 
moulin a vapeur, la societe avec le capitalize industriel." Marx, La 
Misire de la phUosophie (Paris and Brussels, 1847), p. 100. 


were convinced that each such new invention brought 
them a step nearer the realization of their hopes, the 
coming of socialism. 8 

There have been, before Marx and after Marx, many 
historians and philosophers who emphasized the promi- 
nent role the improvement of technological methods of 
production has played in the history of civilization. A 
glance into the popular textbooks of history published 
in the last one hundred and fifty years shows that their 
authors duly stressed the importance of new inventions 
and of the changes they brought about. They never con- 
tested the truism that material well-being is the indis- 
pensable condition of a nation's moral, intellectual, and 
artistic achievement. 

But what Marx says is entirely different. In his doc- 
trine the tools and machines are the ultimate thing, a 
material thing, viz., the material productive forces. 
Everything else is the necessary superstructure of this 
material basis. This fundamental thesis is open to three 
irrefutable objections. 

First, a technological invention is not something ma- 
terial. It is the product of a mental process, of reason- 
ing and conceiving new ideas. The tools and machines 
may be called material, but the operation of the mind 
which created them is certainly spiritual. Marxian ma- 
terialism does not trace back "superstructural" and 

5. Marx and some of his followers at times also included natural re- 
sources in the notion of material productive forces. But these remarks 
were made only incidentally and were never elaborated, obviously 
because this would have led them into the doctrine that explains 
history as determined by the structure of the people's geographical 


"ideological" phenomena to "material" roots. It explains 
these phenomena as caused by an essentially mental 
process, viz., invention. It assigns to this mental process, 
which it falsely labels an original, nature-given, mate- 
rial fact, the exclusive power to beget all other social 
and intellectual phenomena. But it does not attempt to 
explain how inventions come to pass. 

Second, mere invention and designing of technologi- 
cally new implements are not sufficient to produce 
them. What is required, in addition to technological 
knowledge and planning, is capital previously accumu- 
lated out of saving. Every step forward on the road to- 
ward technological improvement presupposes the re- 
quisite capital. The nations today called underdeveloped 
know what is needed to improve their backward ap- 
paratus of production. Plans for the construction of all 
the machines they want to acquire are ready or could 
be completed in a very short time. Only lack of capital 
holds them up. But saving and capital accumulation 
presuppose a social structure in which it is possible to 
save and to invest. The production relations are thus 
not the product of the material productive forces but, 
on the contrary, the indispensable condition of their 
coming into existence. 

Marx, of course, cannot help admitting that capital 
accumulation is "one of the most indispensable condi- 
tions for the evolution of industrial production." 6 Part 
of his most voluminous treatise, Das Kapital, provides 

6. Marx, La Misire de la phUosophie, English trans., The Poverty 
of Philosophy (New York, International Publishers, n.d.), p. 115. 


a history — wholly distorted — of capital accumulation. 
But as soon as he comes to his doctrine of materialism, 
he forgets all he said about this subject. Then the tools 
and machines are created by spontaneous generation, 
as it were. 

Furthermore it must be remembered that the utiliza- 
tion of machines presupposes social cooperation under 
the division of labor. No machine can be constructed 
and put into use under conditions in which there is no 
division of labor at all or only a rudimentary stage of it. 
Division of labor means social cooperation, i.e., social 
bonds between men, society. How then is it possible to 
explain the existence of society by tracing it back to the 
material productive forces which themselves can only 
appear in the frame of a previously existing social 
nexus? Marx could not comprehend this problem. He 
accused Proudhon, who had described the use of ma- 
chines as a consequence of the division of labor, of ig- 
norance of history. It is a distortion of fact, he shouted, 
to start with the division of labor and to deal with ma- 
chines only later. For the machines are "a productive 
force," not a "social production relation," not an "eco- 
nomic category." 7 Here we are faced with a stubborn 
dogmatism that does not shrink from any absurdity. 

We may summarize the Marxian doctrine in this way: 
In the beginning there are the "material productive 
forces," i.e., the technological equipment of human pro- 
ductive efforts, the tools and machines. No question 
concerning their origin is permitted; they are, that is 

7. Ibid., pp. 112-13. 


all; we must assume that they are dropped from heaven. 
These material productive forces compel men to enter 
into definite production relations which are independ- 
ent of their wills. These production relations farther on 
determine society's juridical and political superstruc- 
ture as well as all religious, artistic, and philosophical 

3. The Class Struggle 

As will be pointed out below, any philosophy of his- 
tory must demonstrate the mechanism by means of 
which the supreme agency that directs the course of all 
human affairs induces individuals to walk in precisely 
the ways which are bound to lead mankind toward the 
goal set. In Marx's system the doctrine of the class strug- 
gle is designed to answer this question. 

The inherent weakness of this doctrine is that it deals 
with classes and not with individuals. What has to be 
shown is how the individuals are induced to act in such 
a way that mankind finally reaches the point the pro- 
ductive forces want it to attain. Marx answers that con- 
sciousness of the interests of their class determines the 
conduct of the individuals. It still remains to be ex- 
plained why the individuals give the interests of their 
class preference over their own interests. We may for 
the moment refrain from asking how the individual 
learns what the genuine interests of his class are. But 
even Marx cannot help admitting that a conflict exists 
between the interests of an individual and those of the 


class to which he belongs. 1 He distinguishes between 
those proletarians who are class conscious, i.e., place 
the concerns of their class before their individual con- 
cerns, and those who are not. He considers it one of the 
objectives of a socialist party to awake to class con- 
sciousness those proletarians who are not spontaneously 
class conscious. 

Marx obfuscated the problem by confusing the no- 
tions of caste and class. Where status and caste differ- 
ences prevail, all members of every caste but the most 
privileged have one interest in common, viz., to wipe 
out the legal disabilities of their own caste. All slaves, 
for instance, are united in having a stake in the aboli- 
tion of slavery. But no such conflicts are present in a 
society in which all citizens are equal before the law. 
No logical objection can be advanced against distin- 
guishing various classes among the members of such a 
society. Any classification is logically permissible, how- 
ever arbitrarily the mark of distinction may be chosen. 
But it is nonsensical to classify the members of a capi- 
talistic society according to their position in the frame- 
work of the social division of labor and then to identify 
these classes with the castes of a status society. 

In a status society the individual inherits his caste 
membership from his parents, he remains through all his 
life in his caste, and his children are born as members 

1. Thus we read in the Communist Manifesto: "The organization 
of the proletarians into a class, and consequently into a political party, 
is at every instant again shattered by the competition between the 
workers themselves." 


of it. Only in exceptional cases can good luck raise a 
man into a higher caste. For the immense majority birth 
unalterably determines their station in life. The classes 
which Marx distinguishes in a capitalistic society are 
different. Their membership is fluctuating. Class affilia- 
tion is not hereditary. It is assigned to each individual 
by a daily repeated plebiscite, as it were, of all the 
people. The public in spending and buying determines 
who should own and run the plants, who should play 
the parts in the theater performances, who should work 
in the factories and mines. Rich men become poor, and 
poor men rich. The heirs as well as those who them- 
selves have acquired wealth must try to hold their own 
by defending their assets against the competition of 
already established firms and of ambitious newcomers. 
In the unhampered market economy there are no privi- 
leges, no protection of vested interests, no barriers pre- 
venting anybody from striving after any prize. Access 
to any of the Marxian classes is free to everybody. The 
members of each class compete with one another; they 
are not united by a common class interest and not op- 
posed to the members of other classes by being allied 
either in the defense of a common privilege which those 
wronged by it want to see abolished or in the attempt 
to abolish an institutional disability which those deriv- 
ing advantage from it want to preserve. 

The laissez-faire liberals asserted: If the old laws es- 
tablishing status privileges and disabilities are repealed 
and no new practices of the same character — such as 
tariffs, subsidies, discriminatory taxation, indulgence 
granted for nongovernmental agencies like churches, 


unions, and so on to use coercion and intimidation — are 
introduced, there is equality of all citizens before the 
law. Nobody is hampered in his aspirations and ambi- 
tions by any legal obstacles. Everybody is free to com- 
pete for any social position or function for which his 
personal abilities qualify him. 

The communists denied that this is the way capital- 
istic society as organized under the liberal system of 
equality before the law, is operating. In their eyes pri- 
vate ownership of the means of production conveys to 
the owners — the bourgeois or capitalists in Marx's ter- 
minology — a privilege virtually not different from those 
once accorded to the feudal lords. The "bourgeois revo- 
lution" has not abolished privilege and discrimination 
against the masses; it has, says the Marxian, merely sup- 
planted the old ruling and exploiting class of noblemen 
by a new ruling and exploiting class, the bourgeoisie. 
The exploited class, the proletarians, did not profit from 
this reform. They have changed masters but they have 
remained oppressed and exploited. What is needed is 
a new and final revolution, which in abolishing private 
ownership of the means of production will establish the 
classless society. 

This socialist or communist doctrine fails entirely to 
take into account the essential difference between the 
conditions of a status or caste society and those of a 
capitalistic society. Feudal property came into existence 
either by conquest or by donation on the part of a con- 
queror. It came to an end either by revocation of the 
donation or by conquest on the part of a more powerful 
conqueror. It was property by "the grace of God," be- 


cause it was ultimately derived from military victory 
which the humility or conceit of the princes ascribed to 
special intervention of the Lord. The owners of feudal 
property did not depend on the market, they did not 
serve the consumers; within the range of their property 
rights they were real lords. But it is quite different with 
the capitalists and entrepreneurs of a market economy. 
They acquire and enlarge their property through the 
services they have rendered to the consumers, and they 
can retain it only by serving daily again in the best pos- 
sible way. This difference is not eradicated by meta- 
phorically calling a successful manufacturer of spa- 
ghetti "the spaghetti king." 

Marx never embarked on the hopeless task of refut- 
ing the economists' description of the working of the 
market economy. Instead he was eager to show that 
capitalism must in the future lead to very unsatisfactory 
conditions. He undertook to demonstrate that the oper- 
ation of capitalism must inevitably result in the con- 
centration of wealth in the possession of an ever dimin- 
ishing number of capitalists on the one hand and in the 
progressive impoverishment of the immense majority 
on the other hand. In the execution of this task he 
started from the spurious iron law of wages according 
to which the average wage rate is that quantum of the 
means of subsistence which is absolutely required to 
enable the laborer to barely survive and to rear prog- 
eny. 2 This alleged law has long since been entirely dis- 

2. Of course, Marx did not like the German term "das eheme 
Lohngesetz" because it had been devised by his rival Ferdinand 


credited, and even the most bigoted Marxians have 
dropped it. But even if one were prepared for the sake 
of argument to call the law correct, it is obvious that it 
can by no means serve as the basis of a demonstration 
that the evolution of capitalism leads to progressive im- 
poverishment of the wage earners. If wage rates under 
capitalism are always so low that for physiological 
reasons they cannot drop any further without wiping 
out the whole class of wage earners, it is impossible to 
maintain the thesis of the Communist Manifesto that 
the laborer "sinks deeper and deeper" with the progress 
of industry. Like all Marx's other arguments this dem- 
onstration is contradictory and self-defeating. Marx 
boasted of having discovered the immanent laws of cap- 
italist evolution. The most important of these laws he 
considered the law of progressive impoverishment of 
the wage-earning masses. It is the operation of this law 
that brings about the final collapse of capitalism and 
the emergence of socialism. 3 When this law is seen to 
be spurious, the foundation is pulled from under both 
Marx's system of economics and his theory of capitalist 

Incidentally we have to establish the fact that in cap- 
italistic countries the standard of living of the wage 
earners has improved in an unprecedented and un- 
dreamt-of way since the publication of the Communist 
Manifesto and the first volume of Das Kapital. Marx 
misrepresented the operation of the capitalist system 
in every respect. 

The corollary of the alleged progressive impoverish- 

3. Marx, Das Kapital, 1, 728. 


ment of the wage earners is the concentration of all 
riches in the hands of a class of capitalist exploiters 
whose membership is continually shrinking. In dealing 
with this issue Marx failed to take into account the fact 
that the evolution of big business units does not neces- 
sarily involve the concentration of wealth in a few 
hands. The big business enterprises are almost without 
exception corporations, precisely because they are too 
big for single individuals to own them entirely. The 
growth of business units has far outstripped the growth 
of individual fortunes. The assets of a corporation are 
not identical with the wealth of its shareholders. A con- 
siderable part of these assets, the equivalent of pre- 
ferred stock and bonds issued and of loans raised, be- 
long virtually, if not in the sense of the legal concept of 
ownership, to other people, viz., to owners of bonds and 
preferred stock and to creditors. Where these securities 
are held by savings banks and insurance companies and 
these loans were granted by such banks and companies, 
the virtual owners are the people who have claims 
against them. Also the common stock of a corporation 
is as a rule not concentrated in the hands of one man. 
The bigger the corporation, as a rule, the more widely 
its shares are distributed. 

Capitalism is essentially mass production to fill the 
needs of the masses. But Marx always labored under the 
deceptive conception that the workers are toiling for the 
sole benefit of an upper class of idle parasites. He did 
not see that the workers themselves consume by far the 
greater part of all the consumers' goods turned out. The 
millionaires consume an almost negligible part of what 


is called the national product. All branches of big busi- 
ness cater directly or indirectly to the needs of the com- 
mon man. The luxury industries never develop beyond 
small-scale or medium-size units. The evolution of big 
business is in itself proof of the fact that the masses and 
not the nabobs are the main consumers. Those who deal 
with the phenomenon of big business under the rubric 
"concentration of economic power" fail to realize that 
economic power is vested in the buying public on whose 
patronage the prosperity of the factories depends. In 
his capacity as buyer, the wage earner is the customer 
who is "always right." But Marx declares that the bour- 
geoisie "is incompetent to assure an existence to its slave 
within his slavery." 

Marx deduced the excellence of socialism from the 
fact that the driving force of historical evolution, the 
material productive forces, is bound to bring about so- 
cialism. As he was engrossed in the Hegelian brand of 
optimism, there was to his mind no further need to 
demonstrate the merits of socialism. It was obvious to 
him that socialism, being a later stage of history than 
capitalism, was also a better stage. 4 It was sheer blas- 
phemy to doubt its merits. 

What was still left to show was the mechanism by 
means of which nature brings about the transition from 
capitalism to socialism. Nature's instrument is the class 
struggle. As the workers sink deeper and deeper with 
the progress of capitalism, as their misery, oppression, 
slavery, and degradation increase, they are driven to 
revolt, and their rebellion establishes socialism. 

4. On the fallacy implied in this reasoning, see below pp. 175 ff. 


The whole chain of this reasoning is exploded by the 
establishment of the fact that the progress of capitalism 
does not pauperize the wage earners increasingly but 
on the contrary improves their standard of living. Why 
should the masses be inevitably driven to revolt when 
they get more and better food, housing and clothing, 
cars and refrigerators, radio and television sets, nylon 
and other synthetic products? Even if, for the sake of 
argument, we were to admit that the workers are driven 
to rebellion, why should their revolutionary upheaval 
aim just at the establishment of socialism? The only mo- 
tive which could induce them to ask for socialism would 
be the conviction that they themselves would fare 
better under socialism than under capitalism. But Marx- 
ists, anxious to avoid dealing with the economic prob- 
lems of a socialist commonwealth, did nothing to dem- 
onstrate the superiority of socialism over capitalism 
apart from the circular reasoning that runs: Socialism 
is bound to come as the next stage of historical evolu- 
tion. Being a later stage of history than capitalism, it is 
necessarily higher and better than capitalism. Why is 
it bound to come? Because the laborers, doomed to pro- 
gressive impoverishment under capitalism, will rebel 
and establish socialism. But what other motive could 
impel them to aim at the establishment of socialism 
than the conviction that socialism is better than capital- 
ism? And this pre-eminence of socialism is deduced by 
Marx from the fact that the coming of socialism is in- 
evitable. The circle is closed. 

In the context of the Marxian doctrine the superiority 
of socialism is proved by the fact that the proletarians 
are aiming at socialism. What the philosophers, the 


Utopians, think does not count. What matters is the 
ideas of the proletarians, the class that history has en- 
trusted with the task of shaping the future. 

The truth is that the concept of socialism did not 
originate from the "proletarian mind." No proletarian 
or son of a proletarian contributed any substantial idea 
to the socialist ideology. The intellectual fathers of so- 
cialism were members of the intelligentsia, scions of 
the "bourgeoisie." Marx himself was the son of a well- 
to-do lawyer. He attended a German Gymnasium, the 
school all Marxians and other socialists denounce as the 
main offshoot of the bourgeois system of education, and 
his family supported him through all the years of his 
studies; he did not work his way through the university. 
He married the daughter of a member of the German 
nobility; his brother-in-law was Prussian minister of 
the interior and as such head of the Prussian police. In 
his household served a maid, Helene Demuth, who 
never married and who followed the Marx menage in 
all its shifts of residence, the perfect model of the ex- 
ploited slavey whose frustration and stunted sex life 
have been repeatedly depicted in the German "social" 
novel. Friedrich Engels was the son of a wealthy manu- 
facturer and himself a manufacturer; he refused to 
marry his mistress Mary because she was uneducated 
and of "low" descent; 5 he enjoyed the amusements of 
the British gentry such as riding to hounds. 

The workers were never enthusiastic about socialism. 

5. After the death of Mary, Engels took her sister Lizzy as mistress. 
He married her on her deathbed "in order to provide her a last pleas- 
tire." Gustav Mayer, Frederick Engels (The Hague, Martinus Nijhoff, 
1934), 2, 329. 


They supported the union movement whose striving 
after higher wages Marx despised as useless. 6 They 
asked for all those measures of government interference 
with business which Marx branded petty-bourgeois 
nonsense. They opposed technological improvement, in 
earlier days by destroying new machines, later by union 
pressure and compulsion in favor of feather-bedding. 
Syndicalism — appropriation of the enterprises by the 
workers employed in them — is a program that the work- 
ers developed spontaneously. But socialism was brought 
to the masses by intellectuals of bourgeois background. 
Dining and wining together in the luxurious London 
homes and country seats of late Victorian "society," la- 
dies and gentlemen in fashionable evening clothes con- 
cocted schemes for converting the British proletarians 
to the socialist creed. 

4. The Ideological Impregnation of Thought 

From the supposed irreconcilable conflict of class in- 
terests Marx deduces his doctrine of the ideological im- 
pregnation of thought. In a class society man is inher- 
ently unfit to conceive theories which are a substantially 
true description of reality. As his class affiliation, his 
social being, determines his thoughts, the products of 
his intellectual effort are ideologically tainted and dis- 
torted. They are not truth, but ideologies. An ideology 
in the Marxian sense of the term is a false doctrine 
which, however, precisely on account of its falsity, 

6. Marx, Value, Price and Profit, ed. E. Marx Aveling (Chicago, 
Charles H. Kerr & Co. Cooperative), pp. 125-6. See below p. 137. 


serves the interests of the class from which its author 

We may omit here dealing with many aspects of this 
ideology doctrine. We need not disprove anew the doc- 
trine of polylogism, according to which the logical 
structure of mind differs in the members of various 
classes. 1 We may furthermore admit that the main con- 
cern of a thinker is exclusively to promote the interests 
of his class even if these clash with his interests as an 
individual. We may finally abstain from questioning the 
dogma that there is no such thing as the disinterested 
search for truth and knowledge and that all human in- 
quiry is exclusively guided by the practical purpose of 
providing mental tools for successful action. The ide- 
ology doctrine would remain untenable even if all the 
irrefutable objections that can be raised from the point 
of view of these three aspects could be rejected. 

Whatever one may think of the adequacy of the prag- 
matist definition of truth, it is obvious that at least one 
of the characteristic marks of a true theory is that action 
based on it succeeds it attaining the expected result. In 
this sense truth works, while untruth does not work. 
Precisely if we assume, in agreement with the Marxians, 
that the end of theorizing is always success in action, 
the question must be raised why and how an ideological 
( that is, in the Marxian sense, a false ) theory should be 
more useful to a class than a correct theory? There is no 
doubt that the study of mechanics was motivated, at 
least to some extent, by practical considerations. Peo- 
ple wanted to make use of the theorems of mechanics to 

1. Mises, Human Action, pp. 72-91. 


solve various problems of engineering. It was precisely 
the pursuit of these practical results that impelled them 
to search for a correct, not for a merely ideological 
(false) science of mechanics. No matter how one looks 
at it, there is no way in which a false theory can serve 
a man or a class or the whole of mankind better than a 
correct theory. How did Marx come to teach such a 

To answer this question we must remember the mo- 
tive that impelled Marx to all his literary ventures. He 
was driven by one passion — to fight for the adoption of 
socialism. But he was fully aware of his inability to op- 
pose any tenable objection to the economists' devastat- 
ing criticism of all socialist plans. He was convinced 
that the system of economic doctrine developed by the 
Classical economists was impregnable, and remained 
unaware of the serious doubts which essential theorems 
of this system had already raised in some minds. Like 
his contemporary John Stuart Mill he believed "there is 
nothing in the laws of value which remains for the 
present or any future writer to clear up; the theory of 
the subject is complete." 2 When in 1871 the writings of 
Carl Menger and William Stanley Jevons inaugurated 
a new epoch of economic studies, Marx's career as a 
writer on economic problems had already come to a 
virtual end. The first volume of Das Kapital had been 
published in 1867; the manuscript of the following vol- 
umes was well along. There is no indication that Marx 
ever grasped the meaning of the new theory. Marx's 
economic teachings are essentially a garbled rehash of 

2. Mill, Principles of Political Economy, Bk. Ill, ch. 1, § 1. 


the theories of Adam Smith and, first of all, of Ricardo. 
Smith and Ricardo had not had any opportunity to re- 
fute socialist doctrines, as these were advanced only 
after their death. So Marx let them alone. But he vented 
his full indignation upon their successors who had tried 
to analyze the socialist schemes critically. He ridiculed 
them, calling them "vulgar economists" and "sycophants 
of the bourgeoisie." And as it was imperative for him to 
defame them, he contrived his ideology scheme. 

These "vulgar economists" are, because of their bour- 
geois background, constitutionally unfit to discover 
truth. What their reasoning produces can only be ideo- 
logical, that is, as Marx employed the term "ideology," 
a distortion of truth serving the class interests of the 
bourgeoisie. There is no need to refute their chains of 
argument by discursive reasoning and critical analysis. 
It is enough to unmask their bourgeois background and 
thereby the necessarily "ideological" character of their 
doctrines. They are wrong because they are bourgeois. 
No proletarian must attach any importance to their 

To conceal the fact that this scheme was invented ex- 
pressly to discredit the economists, it was necessary to 
elevate it to the dignity of a general epistemological law 
valid for all ages and for all branches of knowledge. 
Thus the ideology doctrine became the nucleus of 
Marxian epistemology. Marx and all his disciples con- 
centrated their efforts upon the justification and ex- 
emplification of this makeshift. They did not shrink 
from any absurdity. They interpreted all philosophical 
systems, physical and biological theories, all literature, 


music, and art from the "ideological" point of view. But, 
of course, they were not consistent enough to assign to 
their own doctrines merely ideological character. The 
Marxian tenets, they implied, are not ideologies. They 
are a foretaste of the knowledge of the future classless 
society which, freed from the fetters of class conflicts, 
will be in a position to conceive pure knowledge, un- 
tainted by ideological blemishes. 

Thus we can understand the thymological motives 
that led Marx to his ideology doctrine. Yet this does not 
answer the question why an ideological distortion of 
truth should be more advantageous to the interests of 
a class than a correct doctrine. Marx never ventured to 
explain this, probably aware that any attempt to would 
entangle him in an inextricable jumble of absurdities 
and contradictions. 

There is no need to emphasize the ridiculousness of 
contending that an ideological physical, chemical, or 
therapeutical doctrine could be more advantageous for 
any class or individual than a correct one. One may pass 
over in silence the declarations of the Marxians con- 
cerning the ideological character of the theories devel- 
oped by the bourgeois Mendel, Hertz, Planck, Heisen- 
berg, and Einstein. It is sufficient to scrutinize the al- 
leged ideological character of bourgeois economics. 

As Marx saw it, their bourgeois background impelled 
the Classical economists to develop a system from 
which a justification of the unfair claims of the capital- 
ist exploiters must logically follow. ( In this he contra- 
dicts himself, as he drew from the same system just the 
opposite conclusions.) These theorems of the Classical 


economists from which the apparent justification of cap- 
italism could be deduced were the theorems which 
Marx attacked most furiously: that the scarcity of the 
material factors of production on which man's well- 
being depends is an inevitable, nature-given condition 
of human existence; that no system of society's eco- 
nomic organization could create a state of abundance 
in which to everybody could be given according to his 
needs; that the recurrence of periods of economic de- 
pressions is not inherent in the very operation of an un- 
hampered market economy but, on the contrary, the 
necessary outcome of government's interfering with 
business with the spurious aim of lowering the rate of 
interest and making business boom by inflation and 
credit expansion. But, we must ask, of what use, from 
the very Marxian point of view, could such a justifica- 
tion of capitalism be for the capitalists? They them- 
selves did not need any justification for a system which 
— according to Marx — while wronging the workers was 
beneficial to themselves. They did not need to quiet 
their own consciences since, again according to Marx, 
every class is remorseless in the pursuit of its own self- 
ish class interests. 

Neither is it, from the point of view of the Marxian 
doctrine, permissible to assume that the service which 
the ideological theory, originating from a "false con- 
sciousness" and therefore distorting the true state of af- 
fairs, rendered to the exploiting class was to beguile the 
exploited class and to make it pliable and subservient, 
and thereby to preserve or at least to prolong the unfair 
system of exploitation. For, according to Marx, the 


duration of a definite system of production relations 
does not depend on any spiritual factors. It is exclu- 
sively determined by the state of the material produc- 
tive forces. If the material productive forces change, 
the production relations (i.e., the property relations) 
and the whole ideological superstructure must change 
too. This transformation cannot be accelerated by any 
human effort. For as Marx said, "no social formation 
ever disappears before all the productive forces are de- 
veloped for which it is broad enough, and new higher 
production relations never appear before the material 
conditions of their existence have been hatched out in 
the womb of the old society." 8 

This is by no means merely an incidental observation 
of Marx. It is one of the essential points of his doctrine. 
It is the theorem on which he based his claim to call his 
own doctrine scientific socialism as distinguished from 
the merely Utopian socialism of his predecessors. The 
characteristic mark of the Utopian socialists, as he saw 
it, was that they believed that the realization of social- 
ism depends on spiritual and intellectual factors. You 
have to convince people that socialism is better than 
capitalism and then they will substitute socialism for 
capitalism. In Marx's eyes this Utopian creed was ab- 
surd. The coming of socialism in no way depends on the 
thoughts and wills of men; it is an outgrowth of the de- 
velopment of the material productive forces. When the 
time is fulfilled and capitalism has reached its maturity, 
socialism will come. It can appear neither earlier nor 

3. Marx, Zuf Kritik der politischen Oekonomie, p. xii (see above 
pp. 107 f.). 


later. The bourgeois may contrive the most cleverly 
elaborated ideologies — in vain; they cannot delay the 
day of the breakdown of capitalism. 

Perhaps some people, intent upon salvaging the 
Marxian "ideology" concept, would argue this way: The 
capitalists are ashamed of their role in society. They 
feel guilty at being "robber barons, usurers, and ex- 
ploiters" and pocketing profits. They need a class ide- 
ology in order to restore their self-assertion. But why 
should they blush? There is, from the point of view of 
the Marxian doctrine, nothing in their conduct to be 
ashamed of. Capitalism, in the Marxian view, is an in- 
dispensable stage in the historical evolution of mankind. 
It is a necessary link in the succession of events which 
finally results in the bliss of socialism. The capitalists, 
in being capitalists, are merely tools of history. They 
execute what, according to the preordained plan for 
mankind's evolution, must be done. They comply with 
the eternal laws which are independent of the human 
will. They cannot help acting the way they do. They do 
not need any ideology, any "false consciousness," to tell 
them that they are right. They are right in the light of 
the Marxian doctrine. If Marx had been consistent, he 
would have exhorted the workers: Don't blame the cap- 
italists; in "exploiting" you they do what is best for your- 
selves; they are paving the way for socialism. 

However one may turn the matter, one cannot dis- 
cover any reason why an ideological distortion of truth 
should be more useful to the bourgeoisie than a correct 


5. The Conflict of Ideologies 

Class consciousness, says Marx, produces class ideolo- 
gies. The class ideology provides the class with an inter- 
pretation of reality and at the same time teaches the 
members how to act in order to benefit their class. The 
content of the class ideology is uniquely determined by 
the historical stage of the development of the material 
productive forces and by the role the class concerned 
plays in this stage of history. The ideology is not an 
arbitrary brain child. It is the reflection of the thinker s 
material class condition as mirrored in his head. It is 
therefore not an individual phenomenon conditional 
upon the thinker's fancy. It is enjoined upon the mind 
by reality, i.e., by the class situation of the man who 
thinks. It is consequently identical with all members of 
the class. Of course, not every class comrade is an au- 
thor and publishes what he has thought. But all writers 
belonging to the class conceive the same ideas and all 
other members of the class approve of them. There is 
no room left in Marxism for the assumption that the 
various members of the same class could seriously dis- 
agree in ideology. There exists for all members of the 
class only one ideology. 

If a man expresses opinions at variance with the ide- 
ology of a definite class, that is because he does not be- 
long to the class concerned. There is no need to refute 
his ideas by discursive reasoning. It is enough to un- 
mask his background and class affiliation. This settles 
the matter. 


But if a man whose proletarian background and 
membership in the workers' class cannot be contested 
diverges from the correct Marxian creed, he is a traitor. 
It is impossible to assume that he could be sincere in 
his rejection of Marxism. As a proletarian he must nec- 
essarily think like a proletarian. An inner voice tells him 
in an unmistakable way what the correct proletarian 
ideology is. He is dishonest in overriding this voice and 
publicly professing unorthodox opinions. He is a rogue, 
a Judas, a snake in the grass. In fighting such a betrayer 
all means are permissible. 

Marx and Engels, two men of unquestionable bour- 
geois background, hatched out the class ideology of the 
proletarian class. They never ventured to discuss their 
doctrine with dissenters as scientists, for instance, dis- 
cuss the pros and cons of the doctrines of Lamarck, Dar- 
win, Mendel, and Weismann. As they saw it, their ad- 
versaries could only be either bourgeois idiots 1 or pro- 
letarian traitors. As soon as a socialist deviated an inch 
from the orthodox creed, Marx and Engels attacked him 
furiously, ridiculed and insulted him, represented him 
as a scoundrel and a wicked and corrupt monster. After 
Engels' death the office of supreme arbiter of what is 
and what is not correct Marxism devolved upon Karl 
Kautsky. In 1917 it passed into the hands of Lenin and 
became a function of the chief of the Soviet govern- 
ment. While Marx, Engels, and Kautsky had to content 
themselves with assassinating the character of their op- 

1. E.g., "bourgeois stupidity" (about Bentham, Das Kapital, 1, 
574), "bourgeois cretinism" (about Destutt de Tracy, ibid., 2, 465), 
and so on. 


ponents, Lenin and Stalin could assassinate them physi- 
cally. Step by step they anathematized those who once 
were considered by all Marxians, including Lenin and 
Stalin themselves, as the great champions of the prole- 
tarian cause: Kautsky, Max Adler, Otto Bauer, Plechan- 
off, Bukharin, Trotsky, Riasanov, Radek, Sinoviev, and 
many others. Those whom they could seize were im- 
prisoned, tortured, and finally murdered. Only those 
who were happy enough to dwell in countries domi- 
nated by "plutodemocratic reactionaries" survived and 
were permitted to die in their beds. 

A good case can be made, from the Marxian point of 
view, in favor of decision by the majority. If a doubt 
concerning the correct content of the proletarian ide- 
ology arises, the ideas held by the majority of the pro- 
letarians are to be considered those which truthfully 
reflect the genuine proletarian ideology. As Marxism 
supposes that the immense majority of people are pro- 
letarians, this would be tantamount to assigning the 
competence to make the ultimate decisions in conflicts 
of opinion to parliaments elected under adult franchise. 
But although to refuse to do this is to explode the whole 
ideology doctrine, neither Marx nor his successors were 
ever prepared to submit their opinions to majority vote. 
Throughout his career Marx mistrusted the people and 
was highly suspicious of parliamentary procedures and 
decisions by the ballot. He was enthusiastic about the 
Paris revolution of June 1848, in which a small minority 
of Parisians rebelled against the government supported 
by a parliament elected under universal manhood suf- 
frage. The Paris Commune of the spring of 1871, in 
which again Parisian socialists fought against the re- 


gime duly established by the overwhelming majority of 
the French people's representatives, was still more to 
his liking. Here he found his ideal of the dictatorship of 
the proletariat, the dictatorship of a self-appointed band 
of leaders, realized. He tried to persuade the Marxian 
parties of all countries of Western and Central Europe 
to base their hopes not upon election campaigns but 
upon revolutionary methods. In this regard the Russian 
communists were his faithful disciples. The Russian 
parliament elected in 1917 under the auspices of the 
Lenin government by all adult citizens had, in spite of 
the violence offered to the voters by the ruling party, 
less than 25 per cent communist members. Three- 
quarters of the people had voted against the commu- 
nists. But Lenin dispersed the parliament by force of 
arms and firmly established the dictatorial rule of a 
minority. The head of the Soviet power became the su- 
preme pontiff of the Marxian sect. His title to this office 
is derived from the fact that he had defeated his rivals 
in a bloody civil war. 

As the Marxians do not admit that differences of opin- 
ion can be settled by discussion and persuasion or de- 
cided by majority vote, no solution is open but civil 
war. The mark of the good ideology, i.e., the ideology 
adequate to the genuine class interests of the proletar- 
ians, is the fact that its supporters succeeded in con- 
quering and liquidating their opponents. 

6. Ideas and Interests 

Marx assumes tacitly that the social condition of a 
class uniquely determines its interests and that there 


can be no doubt what kind of policy best serves these 
interests. The class does not have to choose between 
various policies. The historical situation enjoins upon it 
a definite policy. There is no alternative. It follows that 
the class does not act, since acting implies choosing 
among various possible ways of procedure. The mate- 
rial productive forces act through the medium of the 
class members. 

But Marx, Engels, and all other Marxians ignored 
this fundamental dogma of their creed as soon as they 
stepped beyond the borders of epistemology and began 
commenting upon historical and political issues. Then 
they not only charged the nonproletarian classes with 
hostility to the proletarians but criticized their policies 
as not conducive to promoting the true interests of 
their own classes. 

The most important of Marx's political pamphlets is 
the Address on the Civil War in France ( 1871 ) . It furi- 
ously attacks the French government which, backed by 
the immense majority of the nation, was intent upon 
quelling the rebellion of the Paris Commune. It reck- 
lessly calumniates all the leading members of that gov- 
ernment, calling them swindlers, forgers, and embez- 
zlers. Jules Favre, it charges, was "living in concubinage 
with the wife of a dipsomaniac," and General de Gallif et 
profited from the alleged prostitution of his wife. In 
short, the pamphlet set the pattern for the defamation 
tactics of the socialist press which the Marxians indig- 
nantly chastised as one of the worst excrescences of cap- 
italism when the tabloid press adopted it. Yet all these 
slanderous lies, however reprehensible, may be inter- 


preted as partisan strategems in the implacable war 
against bourgeois civilization. They are at least not in- 
compatible with Marxian epistemological principles. 
But it is another thing to question the expediency of the 
bourgeois policy from the standpoint of the class inter- 
ests of the bourgeoisie. The Address maintains that the 
policy of the French bourgeoisie has unmasked the es- 
sential teachings of its own ideology, the only purpose 
of which is "to delay the class struggle"; henceforth it 
will no longer be possible for the class rule of the bour- 
geoisie "to hide in a nationalist uniform." Henceforth 
there will no longer be any question of peace or armis- 
tice between the workers and their exploiters. The bat- 
tle will be resumed again and again and there can be no 
doubt about the final victory of the workingmen. 1 

It must be noted that these observations were made 
with regard to a situation in which the majority of the 
French people had only to choose between uncondi- 
tional surrender to a small minority of revolutionaries 
or fighting them. Neither Marx nor anybody else had 
ever expected that the majority of a nation would yield 
without resistance to armed aggression on the part of 
a minority. 

Still more important is the fact that Marx in these 
observations ascribes to the policies adopted by the 
French bourgeoisie a decisive influence upon the course 
of events. In this he contradicts all his other writings. 
In the Communist Manifesto he had announced the im- 
placable and relentless class struggle without any re- 

1. Marx, Der Biirgerkrieg in Frankreich, ed. Pfemfert (Berlin, 
1919), p. 7. 


gard to the defense tactics the bourgeois may resort to. 
He had deduced the inevitability of this struggle from 
the class situation of the exploiters and that of the ex- 
ploited. There is no room in the Marxian system for the 
assumption that the policies adopted by the bourgeoisie 
could in any way affect the emergence of the class strug- 
gle and its outcome. 

If it is true that one class, the French bourgeoisie of 
1871, was in a position to choose between alternative 
policies and through its decision to influence the course 
of events, the same must be true also of other classes 
in other historical situations. Then all the dogmas of 
Marxian materialism are exploded. Then it is not true 
that the class situation teaches a class what its genuine 
class interests are and what kind of policy best serves 
these interests. It is not true that only such ideas as are 
conducive to the real interests of a class meet with ap- 
proval on the part of those who direct the policies of 
the class. It may happen that different ideas direct those 
policies and thus get an influence upon the course of 
events. But then it is not true that what counts in his- 
tory are only interests, and that ideas are merely an 
ideological superstructure, uniquely determined by 
these interests. It becomes imperative to scrutinize 
ideas in order to sift those which are really beneficial 
to the interests of the class concerned from those which 
are not. It becomes necessary to discuss conflicting 
ideas with the methods of logical reasoning. The make- 
shift by means of which Marx wanted to outlaw such 
dispassionate weighing of the pros and cons of definite 
ideas breaks down. The way toward an examination of 


the merits and demerits of socialism which Marx wanted 
to prohibit as "unscientific" is reopened. 

Another important address of Marx was his paper of 
1865, Value, Price and Profit. In this document Marx 
criticizes the traditional policies of the labor unions. 
They should abandon their "conservative motto, A fair 
day's wages for a fair day's work! and ought to inscribe 
on their banner the revolutionary watchword, Aboli- 
tion of the wages system!" 2 This is obviously a contro- 
versy about which kind of policy best serves the class 
interests of the workers. Marx in this case deviates from 
his usual procedure of branding all his proletarian op- 
ponents traitors. He implicitly admits that there can 
prevail dissent even among honest and sincere cham- 
pions of the class interests of the workers and that such 
differences must be settled by debating the issue. Per- 
haps on second thought he himself discovered that the 
way he had dealt with the problem involved was incom- 
patible with all his dogmas, for he did not have printed 
this paper which he had read on June 26, 1865, in the 
General Council of the International Workingmen's As- 
sociation. It was first published in 1898 by one of his 

But the theme we are scrutinizing is not Marx's fail- 
ure to cling consistently to his own doctrine and his 
lapses into ways of thinking incompatible with it. We 
have to examine the tenability of the Marxian doctrine 
and must therefore turn to the peculiar connotation the 
term "interests" has in the context of this doctrine. 

Every individual, and for that matter every group of 

2. Marx, Value, Price and Profit, pp. 126-7. 


individuals, aims in acting at the substitution of a state 
of affairs that suits him better for a state of affairs that 
he considers less satisfactory. Without any regard to the 
qualification of these two states of affairs from any other 
point of view, we may say in this sense that he pursues 
his own interests. But the question of what is more de- 
sirable and what is less is decided by the acting indi- 
vidual. It is the outcome of choosing among various 
possible solutions. It is a judgment of value. It is de- 
termined by the individual's ideas about the effects 
these various states may have upon his own well-being. 
But it ultimately depends upon the value he attaches to 
these anticipated effects. 

If we keep this in mind, it is not sensible to declare 
that ideas are a product of interests. Ideas tell a man 
what his interests are. At a later date, looking upon his 
past actions, the individual may form the opinion that 
he has erred and that another mode of acting would 
have served his own interests better. But this does not 
mean that at the critical instant in which he acted he 
did not act according to his interests. He acted accord- 
ing to what he, at that time, considered would serve 
his interests best. 

If an unaffected observer looks upon another man's 
action, he may think: This fellow errs; what he does will 
not serve what he considers to be his interest; another 
way of acting would be more suitable for attaining the 
ends he aims at. In this sense a historian can say today 
or a judicious contemporary could say in 1939: In invad- 
ing Poland Hitler and the Nazis made a mistake; the in- 
vasion harmed what they considered to be their inter- 


ests. Such criticism is sensible so long as it deals only 
with the means and not with the ultimate ends of an 
action. The choice of ultimate ends is a judgment of 
value solely dependent on the judging individual's valu- 
ation. All that another man can say about it is: I would 
have made a different choice. If a Roman had said to a 
Christian doomed to be lacerated by wild beasts in the 
circus: You will best serve your interests by bowing 
down and worshiping the statue of our divine Emperor, 
the Christian would have answered: My prime interest 
is to comply with the precepts of my creed. 

But Marxism, as a philosophy of history claiming to 
know the ends which men are bound to aim at, em- 
ploys the term "interests" with a different connotation. 
The interests it refers to are not those chosen by men 
on the ground of judgments of value. They are the ends 
the material productive forces are aiming at. These 
forces aim at the establishment of socialism. They use 
the proletarians as a means for the realization of this 
end. The superhuman material productive forces pur- 
sue their own interests, independently of the will of 
mortal men. The proletarian class is merely a tool in 
their hands. The actions of the class are not its own ac- 
tions but those which the material productive forces 
perform in using the class as an instrument without a 
will of its own. The class interests to which Marx re- 
fers are in fact the interests of the material productive 
forces which want to be freed from "the fetters upon 
their development." 

Interests of this kind, of course, do not depend upon 
the ideas of ordinary men. They are determined exclu- 


sively by the ideas of the man Marx, who generated 
both the phantom of the material productive forces and 
the anthropomorphic image of their interests. 

In the world of reality, life, and human action there 
is no such thing as interests independent of ideas, pre- 
ceding them temporally and logically. What a man con- 
siders his interest is the result of his ideas. 

If there is any sense in the proposition that the inter- 
ests of the proletarians would be best served by social- 
ism, it is this: the ends which the individual proletarians 
are aiming at will be best achieved by socialism. Such a 
proposition requires proof. It is vain to substitute for 
such a proof the recourse to an arbitrarily contrived sys- 
tem of philosophy of history. 

All this could never occur to Marx because he was 
engrossed by the idea that human interests are uniquely 
and entirely determined by the biological nature of the 
human body. Man, as he saw it, is exclusively interested 
in the procurement of the largest quantity of tangible 
goods. There is no qualitative, only a quantitative, prob- 
lem in the supply of goods and services. Wants do not 
depend on ideas but solely on physiological conditions. 
Blinded by this preconception, Marx ignored the fact 
that one of the problems of production is to decide what 
kind of goods are to be produced. 

With animals and with primitive men on the verge of 
starvation it is certainly true that nothing counts but 
the quantity of edible things they can secure. There is 
no need to point out that conditions are entirely differ- 
ent for men, even for those in the earliest stages of civi- 
lization. Civilized man is faced with the problem of 


choosing among the satisfactions of various needs and 
among various modes of satisfying the same need. His 
interests are diversified and are determined by the ideas 
that influence his choosing. One does not serve the in- 
terests of a man who wants a new coat by giving him a 
pair of shoes or those of a man who wants to hear a 
Beethoven symphony by giving him admission to a 
boxing match. It is ideas that are responsible for the 
fact that the interests of people are disparate. 

Incidentally it may be mentioned that this miscon- 
struing of human wants and interests prevented Marx 
and other socialists from comprehending the distinction 
between freedom and slavery, between the condition of 
a man who himself decides how to spend his income and 
that of a man whom a paternal authority supplies with 
those things which, as the authority thinks, he needs. 
In the market economy the consumers choose and 
thereby determine the quantity and the quality of the 
goods produced. Under socialism the authority takes 
care of these matters. In the eyes of Marx and the Marx- 
ians there is no substantial difference between these two 
methods of want satisfaction; it is of no consequence 
who chooses, the "paltry" individual for himself or the 
authority for all its subjects. They fail to realize that the 
authority does not give its wards what they want to get 
but what, according to the opinion, of the authority, 
they ought to get. If a man who wants to get the Bible 
gets the Koran instead, he is no longer free. 

But even if, for the sake of argument, we were to ad- 
mit that there is uncertainty neither concerning the 
kind of goods people are asking for nor concerning the 


most expedient technological methods of producing 
them, there remains the conflict between interests in 
the short run and those in the long run. Here again the 
decision depends on ideas. It is judgments of value that 
determine the amount of time preference attached to 
the value of present goods as against that of future 
goods. Should one consume or accumulate capital? And 
how far should capital depletion or accumulation go? 

Instead of dealing with all these problems Marx con- 
tented himself with the dogma that socialism will be 
an earthly paradise in which everybody will get all he 
needs. Of course, if one starts from this dogma, one can 
quietly declare that the interests of everybody, what- 
ever they may be, will be best served under socialism. 
In the land of Cockaigne people will no longer need any 
ideas, will no longer have to resort to any judgments of 
value, will no longer think and act. They will only open 
their mouths to let the roast pigeons fly in. 

In the world of reality, the conditions of which are 
the only object of the scientific search for truth, ideas 
determine what people consider to be their interests. 
There is no such thing as interests that could be inde- 
pendent of ideas. It is ideas that determine what people 
consider as their interests. Free men do not act in ac- 
cordance with their interests. They act in accordance 
with what they believe furthers their interests. 

7. The Class Interests of the Bourgeoisie 

One of the starting points of the thinking of Karl 
Marx was the dogma that capitalism, while utterly det- 


rimental to the working class, is favorable to the class 
interests of the bourgeoisie and that socialism, while 
thwarting only the unfair claims of the bourgeoisie, is 
highly beneficial to the whole of mankind. These were 
ideas developed by the French communists and social- 
ists and disclosed to the German public in 1842 by 
Lorenz von Stein in his voluminous book Socialism 
and Communism in Present-Day France. Without any 
qualms Marx adopted this doctrine and all that was im- 
plied in it. It never occurred to him that its fundamental 
dogma might require a demonstration, and the concepts 
it employs a definition. He never defined the concepts 
of a social class and of class interests and their conflicts. 
He never explained why socialism serves the class inter- 
ests of the proletarians and the true interests of the 
whole of mankind better than any other system. This 
attitude has been up to our time the characteristic mark 
of all socialists. They simply take it for granted that life 
under socialism will be blissful. Whoever dares to ask 
for reasons is by this very demand unmasked as a bribed 
apologist of the selfish class interests of the exploiters. 

The Marxian philosophy of history teaches that what 
brings about the coming of socialism is the operation of 
the immanent laws of capitalistic production itself. 
With the inexorability of a law of nature, capitalistic 
production begets its own negation. 1 As no social forma- 
tion ever disappears before all the productive forces are 
developed for which it has room, 2 capitalism must run 
its full course before the time comes for the emergence 

1. Marx, Das Kapttal, 1, 728. 

2. See above, pp. 107 and 128. 


of socialism. The free evolution of capitalism, not upset 
by any political interference, is therefore, from the 
Marxian point of view, highly beneficial to the — we 
would have to say "rightly understood" or long-term — 
class interests of the proletarians. With the progress of 
capitalism on the way to its maturity and consequently 
to its collapse, says the Communist Manifesto, the la- 
borer "sinks deeper and deeper," he "becomes a pau- 
per." But seen sub specie aeternitatis, from the point 
of view of mankind's destination and the long-run inter- 
ests of the proletariat, this "mass of misery, oppression, 
slavery, degradation, and exploitation" is in fact to be 
regarded as a step forward on the road toward eternal 
bliss. It appears therefore not only vain but manifestly 
contrary to the — rightly understood — interests of the 
working class to indulge in — necessarily futile — at- 
tempts to improve the wage earners' conditions through 
reforms within the framework of capitalism. Hence 
Marx rejected labor union endeavors to raise wage rates 
and to shorten the hours of work. The most orthodox 
of all Marxian parties, the German Social-Democrats, 
voted in the eighties in the Reichstag against all meas- 
ures of Bismarck's famous Sozialpolitik, including its 
most spectacular feature, social security. Likewise in 
the opinion of the communists the American New Deal 
was just a foredoomed scheme to salvage dying capital- 
ism by postponing its breakdown and thereby the ap- 
pearance of the socialist millennium. 

If employers oppose what is commonly called pro- 
labor legislation, they are consequently not guilty of 
fighting what Marx considered to be the true interests 


of the proletarian class. On the contrary. In virtually 
freeing economic evolution from the fetters by means 
of which ignorant petty bourgeois, bureaucrats, and 
such Utopian and humanitarian pseudo socialists as the 
Fabians plan to slow it down, they are serving the cause 
of labor and socialism. The very selfishness of the ex- 
ploiters turns into a boon for the exploited and for the 
whole of mankind. Would not Marx, if he had been able 
to follow his own ideas to their ultimate logical conse- 
quences, have been tempted to say, with Mandeville, 
"private vices, public benefits," or, with Adam Smith, 
that the rich "are led by an invisible hand" in such a 
way that they "without intending it, without knowing 
it, advance the interest of the society?" s 

However, Marx was always anxious to bring his rea- 
soning to an end before the point beyond which its in- 
herent contradictions would have become manifest. In 
this regard his followers copied their master's attitude. 

The bourgeois, both capitalists and entrepreneurs, 
say these inconsistent disciples of Marx, are interested 
in the preservation of the laissez-faire system. They are 
opposed to all attempts to alleviate the lot of the most 
numerous, most useful, and most exploited class of men; 
they are intent upon stopping progress; they are reac- 
tionaries committed to the — of course, hopeless — task 
of turning history's clock back. Whatever one may think 
of these passionate effusions, repeated daily by news- 
papers, politicians, and governments, one cannot deny 
that they are incompatible with the essential tenets of 

3. Adam Smith, The Theory of Moral Sentiments, Pt. IV, ch. 1 
(Edinburgh, 1813), 1, 419 ff. 


Marxism. From a consistent Marxian point of view the 
champions of what is called prolabor legislation are re- 
actionary petty bourgeois, while those whom the Marx- 
ians call labor-baiters are progressive harbingers of the 
bliss to come. 

In their ignorance of all business problems, the Marx- 
ians failed to see that the present-day bourgeois, those 
who are already wealthy capitalists and entrepreneurs, 
are in their capacity as bourgeois not selfishly interested 
in the preservation of laissez faire. Under laissez faire 
their eminent position is daily threatened anew by the 
ambitions of impecunious newcomers. Laws that put 
obstacles in the way of talented upstarts are detrimental 
to the interests of the consumers but they protect those 
who have already established their position in business 
against the competition of intruders. In making it more 
difficult for a businessman to reap profit and in taxing 
away the greater part of the profits made, they prevent 
the accumulation of capital by newcomers and thus re- 
move the inducement that impels old firms toward the 
utmost exertion in serving the customers. Measures 
sheltering the less efficient against the competition of 
the more efficient and laws that aim at reducing or con- 
fiscating profits are from the Marxian point of view con- 
servative, nay, reactionary. They tend to prevent tech- 
nological improvement and economic progress and to 
preserve inefficiency and backwardness. If the New 
Deal had started in 1900 and not in 1933, the American 
consumer would have been deprived of many things 
today provided by industries which grew in the first 
decades of the century from insignificant beginnings to 
national importance and mass production. 


The culmination of this misconstruction of industrial 
problems is the animosity displayed against big business 
and against the efforts of smaller concerns to become 
bigger. Public opinion, under the spell of Marxism, con- 
siders "bigness" one of the worst vices of business and 
condones every scheme devised to curb or to hurt big 
business by government action. There is no comprehen- 
sion of the fact that it is solely bigness in business which 
makes it possible to supply the masses with all those 
products the present-day American common man does 
not want to do without. Luxury goods for the few can 
be produced in small shops. Luxury goods for the many 
require big business. Those politicians, professors, and 
union bosses who curse big business are fighting for a 
lower standard of living. They are certainly not further- 
ing the interests of the proletarians. And they are, pre- 
cisely also from the point of view of the Marxian doc- 
trine, ultimately enemies of progress and of improve- 
ment of the conditions of the workers. 

8. The Critics of Marxism 

The materialism of Marx and Engels differs radically 
from the ideas of classical materialism. It depicts hu- 
man thoughts, choices, and actions as determined by 
the material productive forces — tools and machines. 
Marx and Engels failed to see that tools and machines 
are themselves products of the operation of the human 
mind. Even if their sophisticated attempts to describe 
all spiritual and intellectual phenomena, which they call 
superstructuraL as produced by the material productive 
forces had been successful, they would only have traced 


these phenomena back to something which in itself is 
a spiritual and intellectual phenomenon. Their reason- 
ing moves in a circle. Their alleged materialism is in 
fact no materialism at all. It provides merely a verbal 
solution of the problems involved. 

Occasionally even Marx and Engels were aware of 
the fundamental inadequacy of their doctrine. When 
Engels at the grave of Marx summed up what he con- 
sidered to be the quintessence of his friend's achieve- 
ments, he did not mention the material productive 
forces at all. Said Engels: "As Darwin discovered the 
law of evolution of organic nature, Marx discovered the 
law of mankind's historical evolution, that is the simple 
fact, hitherto hidden beneath ideological overgrowths, 
that men must first of all eat, drink, have shelter and 
clothing before they can pursue politics, science, art, 
religion, and the like, that consequently the production 
of the immediately required foodstuffs and therewith 
the stage of economic evolution attained by a people 
or an epoch constitute the foundation out of which the 
governmental institutions, the ideas about right and 
wrong, art, and even the religious ideas of men have 
been developed and by means of which they must be 
explained — not, as hitherto had been done, the other 
way round. 1 Certainly no man was more competent 
than Engels to provide an authoritative interpretation 
of dialectic materialism. But if Engels was right in this 
obituary, then the whole of Marxian materialism fades 

1. Engels, Karl Marx, Rede an seinem Grab, many editions. Re- 
printed in Franz Mehring, Karl Marx (2d ed. Leipzig, 1919, Leip- 
ziger Buchdruckerei Aktiengesellschaft), p. 535. 


away. It is reduced to a truism known to everybody 
from time immemorial and never contested by anybody. 
It says no more than the worn-out aphorism: Primum 
vivere, deinde philosophari. 

As an eristic trick Engels' interpretation turned out 
very well. As soon as somebody begins to unmask the 
absurdities and contradictions of dialectical material- 
ism, the Marxians retort: Do you deny that men must 
first of all eat? Do you deny that men are interested in 
improving the material conditions of their existence? 
Since nobody wants to contest these truisms, they con- 
clude that all the teachings of Marxian materialism are 
unassailable. And hosts of pseudo philosophers fail to 
see through this non sequitur. 

The main target of Marx's rancorous attacks was the 
Prussian state of the Hohenzollern dynasty. He hated 
this regime not because it was opposed to socialism but 
precisely because it was inclined to accept socialism. 
While his rival Lassalle toyed with the idea of realizing 
socialism in cooperation with the Prussian government 
led by Bismarck, Marx's International Workingmen's 
Association sought to supplant the Hohenzollern. Since 
in Prussia the Protestant Church was subject to the 
government and was administered by government offi- 
cials, Marx never tired of vilifying the Christian re- 
ligion too. Anti-Christianism became all the more a 
dogma of Marxism in that the countries whose intellec- 
tuals first were converted to Marxism were Russia and 
Italy. In Russia the church was even more dependent 
on the government than in Prussia. In the eyes of the 
Italians of the nineteenth century anti-Catholic bias was 


the mark of all who opposed the restoration of the 
Pope's secular rule and the disintegration of the newly 
won national unity. 

The Christian churches and sects did not fight social- 
ism. Step by step they accepted its essential political 
and social ideas. Today they are, with but few excep- 
tions, outspoken in rejecting capitalism and advocating 
either socialism or interventionist policies which must 
inevitably result in the establishment of socialism. But, 
of course, no Christian church can ever acquiesce in a 
brand of socialism which is hostile to Christianity and 
aims at its suppression. The churches are implacably 
opposed to the anti-Christian aspects of Marxism. They 
try to distinguish between their own program of social 
reform and the Marxian program. The inherent vicious- 
ness of Marxism they consider to be its materialism and 

However, in fighting Marxian materialism the apolo- 
gists of religion have entirely missed the point. Many 
of them look upon materialism as an ethical doctrine 
teaching that men ought only to strive after satisfaction 
of the needs of their bodies and after a life of pleasure 
and revelry, and ought not to bother about anything 
else. What they advance against this ethical material- 
ism has no reference to the Marxian doctrine and no 
bearing on the issue in dispute. 

No more sensible are the objections raised to Marx- 
ian materialism by those who pick out definite historical 
events — such as the rise of the Christian creed, the cru- 
sades, the religious wars — and triumphantly assert that 
no materialist interpretation of them could be provided. 


Every change in conditions affects the structure of de- 
mand and supply of various material things and thereby 
the short-run interests of some groups of people. It is 
therefore possible to show that there were some groups 
who profited in the short run and others who were 
prejudiced in the short run. Hence the advocates of 
Marxism are always in a position to point out that class 
interests were involved and thus to annul the objections 
raised. Of course, this method of demonstrating the cor- 
rectness of the materialist interpretation of history is 
entirely wrong. The question is not whether group in- 
terests were affected; they are necessarily always af- 
fected at least in the short run. The question is whether 
the striving after lucre of the groups concerned was the 
cause of the event under discussion. For instance, were 
the short-run interests of the munitions industry instru- 
mental in bringing about the bellicosity and the wars 
of our age? In dealing with such problems the Marxians 
never mention that where there are interests pro there 
are necessarily also interests con. They would have to 
explain why the latter did not prevail over the former. 
But the "idealist" critics of Marxism were to dull to ex- 
pose any of the fallacies of dialectical materialism. They 
did not even notice that the Marxians resorted to their 
class-interest interpretation only in dealing with phe- 
nomena which were generally condemned as bad, never 
in dealing with phenomena of which all people approve. 
If one ascribes warring to the machinations of muni- 
tions capital and alcoholism to machinations of the li- 
quor trade, it would be consistent to ascribe cleanliness 
to the designs of the soap manufacturers and the flower- 


ing of literature and education to the maneuvering of 
the publishing and printing industries. But neither the 
Marxians nor their critics ever thought of it. 

The outstanding fact in all this is that the Marxian 
doctrine of historical change has never received any 
judicious critique. It could triumph because its ad- 
versaries never disclosed its fallacies and inherent con- 

How entirely people have misunderstood Marxian 
materialism is shown in the common practice of lump- 
ing together Marxism and Freud's psychoanalysis. Ac- 
tually no sharper contrast can be thought of than that 
between these two doctrines. Materialism aims at re- 
ducing mental phenomena to material causes. Psycho- 
analysis, on the contrary, deals with mental phenomena 
as with an autonomous field. While traditional psychia- 
try and neurology tried to explain all pathological con- 
ditions with which they were concerned as caused by 
definite pathological conditions of some bodily organs, 
psychoanalysis succeeded in demonstrating that ab- 
normal states of the body are sometimes produced by 
mental factors. This discovery was the achievement of 
Charcot and of Josef Breuer, and it was the great ex- 
ploit of Sigmund Freud to build upon this foundation a 
comprehensive systematic discipline. Psychoanalysis is 
the opposite of all brands of materialism. If we look 
upon it not as a branch of pure knowledge but as a 
method of healing the sick, we would have to call it a 
thymological branch (geistestvissenschaftlicher Zweig) 
of medicine. 

Freud was a modest man. He did not make extrava- 


gant pretensions regarding the importance of his con- 
tributions. He was very cautious in touching upon prob- 
lems of philosophy and branches of knowledge to the 
development of which he himself had not contributed. 
He did not venture to attack any of the metaphysical 
propositions of materialism. He even went so far as to 
admit that one day science may succeed in providing a 
purely physiological explanation of the phenomena psy- 
choanalysis deals with. Only so long as this does not 
happen, psychoanalysis appeared to him scientifically 
sound and practically indispensable. He was no less 
cautious in criticizing Marxian materialism. He freely 
confessed his incompetence in this field. 2 But all this 
does not alter the fact that the psychoanalytical ap- 
proach is essentially and substantially incompatible 
with the epistemology of materialism. 

Psychoanalysis stresses the role that the libido, the 
sexual impulse, plays in human life. This role had been 
neglected before by psychology as well as by all other 
branches of knowledge. Psychoanalysis also explains the 
reasons for this neglect. But it by no means asserts that 
sex is the only human urge seeking satisfaction and 
that all psychic phenomena are induced by it. Its pre- 
occupation with sexual impulses arose from the fact that 
it started as a therapeutical method and that most of 
the pathological conditions it had to deal with are 
caused by the repression of sexual urges. 

The reason some authors linked psychoanalysis and 
Marxism was that both were considered to be at vari- 

2. Freud, Neue Folge der Vorlestmgen but Einfiihrung in die 
Psychoanalyse (Vienna, 1933), pp. 246-53. 


ance with theological ideas. However, with the passing 
of time theological schools and groups of various de- 
nominations are adopting a different evaluation of the 
teachings of Freud. They are not merely dropping their 
radical opposition as they have already done before 
with regard to modern astronomical and geological 
achievements and the theories of phylogenetic change 
in the structure of organisms. They are trying to inte- 
grate psychoanalysis into the system and the practice 
of pastoral theology. They view the study of psycho- 
analysis as an important part of the training for the 
ministry. 8 

As conditions are today, many defenders of the au- 
thority of the church are guideless and bewildered in 
their attitude toward philosophical and scientific prob- 
lems. They condemn what they could or even should 
endorse. In fighting spurious doctrines, they resort to 
untenable objections which in the minds of those who 
can discern the fallaciousness of the objections rather 
strengthen the tendency to believe that the attacked 
doctrines are sound. Being unable to discover the real 
flaw in false doctrines, these apologists for religion may 
finally end by approving them. This explains the curious 
fact that there are nowadays tendencies in Christian 
writings to adopt Marxian dialectical materialism. Thus 
a Presbyterian theologian, Professor Alexander Miller, 

3. Of course, few theologians would be prepared to endorse the 
interpretation of an eminent Catholic historian of medicine, Professor 
Petro L. Entralgo, according to which Freud has "brought to full 
development some of the possibilities offered by Christianity." P. L. 
Entralgo, Mind and Body, trans, by A. M. Esplnosa, Jr. (New York, 
P. J. Kennedy and Sons, 1956), p. 131. 


believes that Christianity "can reckon with the truth 
in historical materialism and with the fact of class- 
struggle." He not only suggests, as many eminent lead- 
ers of various Christian denominations have done be- 
fore him, that the church should adopt the essential 
principles of Marxian politics. He thinks the church 
ought to "accept Marxism" as "the essence of a scien- 
tific sociology." 4 How odd to reconcile with the Nicene 
creed a doctrine teaching that religious ideas are the 
superstructure of the material productive forces! 

9. Marxian Materialism and Socialism 

Like many frustrated intellectuals and like almost all 
contemporary Prussian noblemen, civil servants, teach- 
ers, and writers, Marx was driven by a fanatical hatred 
of business and businessmen. He turned toward social- 
ism because he considered it the worst punishment that 
could be inflicted upon the odious bourgeois. At the 
same time he realized that the only hope for socialism 
was to prevent further discussion of its pros and cons. 
People must be induced to accept it emotionally with- 
out asking questions about its effects. 

In order to achieve this, Marx adapted Hegel's phi- 
losophy of history, the official creed of the schools from 
which he had graduated. Hegel had arrogated to him- 
self the faculty of revealing the Lord's hidden plans to 
the public. There was no reason why Doctor Marx 
should stand back and withhold from the people the 

4. Alexander Miller, The Christian Significance of Karl Marx (New 
York, Macmillan, 1947), pp. 80-1. 


good tidings that an inner voice had communicated to 
him. Socialism, this voice announced, is bound to come 
because this is the course that destiny is steering. There 
is no use indulging in debate about the blessings or ills 
to be expected from a socialist or communist mode of 
production. Such debates would be reasonable only if 
men were free to choose between socialism and some 
alternative. Besides, being later in the succession of 
stages of historical evolution, socialism is also neces- 
sarily a higher and better stage, and all doubts about 
the benefits to be derived from it are futile. 1 

The scheme of philosophy of history that describes 
human history as culminating and ending in socialism 
is the essence of Marxism, is Karl Marx's main con- 
tribution to the prosocialist ideology. Like all similar 
schemes including that of Hegel, it was begot by intui- 
tion. Marx called it science, Wissenschaft, because in 
his day no other epithet could give a doctrine higher 
prestige. In pre-Marxian ages it was not customary to 
call philosophies of history scientific. Nobody ever ap- 
plied the term "science" to the prophecies of Daniel, 
the Revelation of St. John, or the writings of Joachim 
of Flora. 

For the same reasons Marx called his doctrine mate- 
rialistic. In the environment of left-wing Hegelianism 
in which Marx lived before he settled in London, mate- 
rialism was the accepted philosophy. It was taken for 
granted that philosophy and science admit of no treat- 
ment of the mind-body problem but that taught by ma- 
terialism. Authors who did not want to be anathema- 
tized by their set had to avoid being suspected of any 

1. See below, pp. 175 ff. 


concession to "idealism." Thus Marx was anxious to call 
his philosophy materialistic. In fact, as has been pointed 
out above, his doctrine does not deal at all with the 
mind-body problem. It does not raise the question of 
how the "material productive forces" come into exist- 
ence and how and why they change. Marx's doctrine is 
not a materialist but a technological interpretation of 
history. But, from a political point of view, Marx did 
well in calling his doctrine scientific and materialistic. 
These predicates lent it a reputation it would never have 
acquired without them. 

Incidentally it must be noted that Marx and Engels 
made no effort to establish the validity of their tech- 
nological interpretation of history. In the earlier days 
of their careers as authors they enunciated their dogmas 
in clear-cut, challenging formulations such as the above- 
quoted dictum about the hand mill and the steam mill. 2 
In later years they became more reserved and cautious; 
after the death of Marx Engels occasionally even made 
remarkable concessions to the "bourgeois" and "ideal- 
istic" point of view. But never did Marx or Engels or 
any of their numerous followers try to give any specifi- 
cations about the operation of a mechanism which 
would out of a definite state of the material productive 
forces bring forth a definite juridical, political, and spir- 
itual superstructure. Their famous philosophy never 
grew beyond the abrupt enunciation of a piquant 

The eristic tricks of Marxism succeeded very well 
and enrolled hosts of pseudo intellectuals in the ranks of 
revolutionary socialism. But they did not discredit what 

2. See above, p. 108. 


economists had asserted about the disastrous conse- 
quences of a socialist mode of production. Marx had 
tabooed the analysis of the operation of a socialist sys- 
tem as Utopian, that is, in his terminology, as unscien- 
tific, and he as well as his successors smeared all authors 
who defied this taboo. Yet these tactics did not alter the 
fact that all Marx contributed to the discussion on so- 
cialism was to disclose what an inner voice had told him, 
namely that the end and aim of mankind's historical 
evolution is expropriation of the capitalists. 

From the epistemological point of view it must be 
emphasized that Marxian materialism does not accom- 
plish what a materialist philosophy claims to do. It does 
not explain how definite thoughts and judgments of 
value originate in the human mind. 

The exposure of an untenable doctrine is not tanta- 
mount to confirmation of a doctrine conflicting with it. 
There is need to state this obvious fact because many 
people have forgotten it. The refutation of dialectical 
materialism implies, of course, invalidation of the Marx- 
ian vindication of socialism. But it does not demonstrate 
the truth of the assertions that socialism is unrealizable, 
that it would destroy civilization and result in misery 
for all, and that its coming is not inevitable. These prop- 
ositions can be established only by economic analysis. 

Marx and all those who sympathize with his doctrines 
have been aware that an economic analysis of socialism 
will show the fallacy of the prosocialist arguments. 
The Marxists cling to historical materialism and stub- 
bornly refuse to listen to its critics because they want 
socialism for emotional reasons. 

Chapter 8. Philosophy of History 

1. The Theme of History 

History deals with human action, that is, the actions 
performed by individuals and groups of individuals. It 
describes the conditions under which people lived and 
the way they reacted to these conditions. Its subject are 
human judgments of value and the ends men aimed at 
guided by these judgments, the means men resorted to 
in order to attain the ends sought, and the outcome of 
their actions. History deals with man's conscious reac- 
tion to the state of his environment, both the natural 
environment and the social environment as determined 
by the actions of preceding generations as well as by 
those of his contemporaries. 

Every individual is born into a definite social and 
natural milieu. An individual is not simply man in gen- 
eral, whom history can regard in the abstract. An in- 
dividual is at any instant of his life the product of all 
the experiences to which his ancestors were exposed 
plus those to which he himself has so far been exposed. 
An actual man lives as a member of his family, his race, 
his people, and his age; as a citizen of his country; as a 
member of a definite social group; as a practitioner of a 
certain vocation. He is imbued with definite religious, 
philosophical, metaphysical, and political ideas, which 
he sometimes enlarges or modifies by his own thinking. 



His actions are guided by ideologies that he has ac- 
quired through his environment. 

However, these ideologies are not immutable. They 
are products of the human mind and they change when 
new thoughts are added to the old stock of ideas or are 
substituted for discarded ideas. In searching for the 
origin of new ideas history cannot go beyond establish- 
ing that they were produced by a man's thinking. The 
ultimate data of history beyond which no historical re- 
search can go are human ideas and actions. The his- 
torian can trace ideas back to other, previously de- 
veloped ideas. He can describe the environmental con- 
ditions to which actions were designed to react. But he 
can never say more about a new idea and a new mode of 
acting than that they originated at a definite point of 
space and time in the mind of a man and were accepted 
by other men. 

Attempts have been made to explain the birth of 
ideas out of "natural" factors. Ideas were described as 
the necessary product of the geographical environment, 
the physical structure of people's habitat. This doctrine 
manifestly contradicts the data available. Many ideas 
are the response elicited by the stimulus of a man's 
physical environment. But the content of these ideas is 
not determined by the environment. To the same phys- 
ical environment various individuals and groups of in- 
dividuals respond in a different way. 

Others have tried to explain the diversity of ideas and 
actions by biological factors. The species man is sub- 
divided into racial groups with distinctive hereditary 
biological traits. Historical experience does not preclude 


the assumption that the members of some racial groups 
are better gifted for conceiving sound ideas than those 
of other races. However, what is to be explained is why 
a man's ideas differ from those of people of the same 
race. Why do brothers differ from one another? 

It is moreover questionable whether cultural back- 
wardness conclusively indicates a racial group's perma- 
nent inferiority. The evolutionary process that trans- 
formed the animal-like ancestors of man into modern 
men extended over many hundreds of thousands of 
years. Viewed in the perspective of this period, the fact 
that some races have not yet reached a cultural level 
other races passed several thousand years ago does not 
seem to matter very much. There are individuals whose 
physical and mental development proceeds more slowly 
than the average who yet in later life far excel most 
normally developing persons. It is not impossible that 
the same phenomenon may occur with whole races. 

There is for history nothing beyond people's ideas 
and the ends they were aiming at motivated by these 
ideas. If the historian refers to the meaning of a fact, 
he always refers either to the interpretation acting men 
gave to the situation in which they had to live and to 
act, and to the outcome of their ensuing actions, or to 
the interpretation which other people gave to the result 
of these actions. The final causes to which history refers 
are always the ends individuals and groups of indi- 
viduals are aiming at. History does not recognize in the 
course of events any other meaning and sense than 
those attributed to them by acting men, judging from 
the point of view of their own human concerns. 


2. The Theme of the Philosophy of History 

Philosophy of history looks upon mankind's history 
from a different point of view. It assumes that God or 
nature or some other superhuman entity providentially 
directs the course of events toward a definite goal dif- 
ferent from the ends which acting men are aiming at. 
There is a meaning in the sequence of events which 
supersedes the intentions of men. The ways of Provi- 
dence are not those of mortal men. The shortsighted in- 
dividual deludes himself in believing that he chooses 
and acts according to his own concerns. In fact he un- 
knowingly must act in such a way that finally the provi- 
dential plan will be realized. The historical process has 
a definite purpose set by Providence without any regard 
to the human will. It is a progress toward a preordained 
end. The task of the philosophy of history is to judge 
every phase of history from the point of view of this 

If the historian speaks of progress and retrogression, 
he refers to one of the ends men are consciously aiming 
at in their actions. In his terminology progress means 
the attainment of a state of affairs which acting men 
considered or consider more satisfactory than pre- 
ceding states. In the terminology of a philosophy of his- 
tory progress means advance on the way that leads to 
the ultimate goal set by Providence. 

Every variety of the philosophy of history must an- 
swer two questions. First: What is the final end aimed 
at and the route by which it is to be reached? Second: 


By what means are people induced or forced to pursue 
this course? Only if both questions are fully answered 
is the system complete. 

In answering the first question the philosopher refers 
to intuition. In order to corroborate his surmise, he may 
quote the opinions of older authors, that is, the intuitive 
speculations of other people. The ultimate source of the 
philosopher's knowledge is invariably a divination of 
the intentions of Providence, hitherto hidden to the non- 
initiated and revealed to the philosopher by dint of his 
intuitive power. To objections raised about the correct- 
ness of his guess the philosopher can only reply: An 
inner voice tells me that I am right and you are wrong. 

Most philosophies of history not only indicate the 
final end of historical evolution but also disclose the 
way mankind is bound to wander in order to reach the 
goal. They enumerate and describe successive states or 
stages, intermediary stations on the way from the early 
beginnings to the final end. The systems of Hegel, 
Comte, and Marx belong to this class. Others ascribe to 
certain nations or races a definite mission entrusted to 
them by the plans of Providence. Such are the role of 
the Germans in the system of Fichte and the role of the 
Nordics and the Aryans in the constructions of modern 

With regard to the answer given to the second ques- 
tion, two classes of philosophies of history are to be dis- 

The first group contends that Providence elects some 
mortal men as special instruments for the execution of 
its plan. In the charismatic leader superhuman powers 


are vested. He is the plenipotentiary of Providence 
whose office it is to guide the ignorant populace the 
right way. He may be a hereditary king, or a commoner 
who has spontaneously seized power and whom the 
blind and wicked rabble in their envy and hatred call a 
usurper. For the charismatic leader but one thing mat- 
ters: the faithful performance of his mission no matter 
what the means he may be forced to resort to. He is 
above all laws and moral precepts. What he does is al- 
ways right, and what his opponents do is always wrong. 
Such was the doctrine of Lenin, who in this point de- 
viated from the doctrine of Marx. 1 

It is obvious that the philosopher does not attribute 
the office of charismatic leadership to every man who 
claims that he has been called. He distinguishes be- 
tween the legitimate leader and the fiendish impostor, 
between the God-sent prophet and the hell-born 
tempter. He calls only those heroes and seers legitimate 
leaders who make people walk toward the goal set by 
Providence. As the philosophies disagree with regard 
to this goal, so they disagree with regard to the distinc- 
tion between the legitimate leader and the devil in- 
carnate. They disagree in their judgments about Caesar 
and Brutus, Innocent III and Frederick II, Charles I 
and Cromwell, the Bourbons and the Napoleons. 

But their dissent goes even further. There are rivalries 
between various candidates for the supreme office 
which are caused only by personal ambition. No ideo- 
logical convictions separated Caesar and Pompey, the 
house of Lancaster and that of York, Trotsky and Stalin. 

1. On the doctrine of Marx see above, pp. 112 ff. 


Their antagonism was due to the fact that they aimed at 
the same office, which of course only one man could get. 
Here the philosopher must choose among various pre- 
tenders. Having arrogated to himself the power to pro- 
nounce judgment in the name of Providence, the philos- 
opher blesses one of the pretenders and condemns his 

The second group suggested another solution of the 
problem. As they see it, Providence resorted to a cun- 
ning device. It implanted in every man's mind certain 
impulses the operation of which must necessarily result 
in the realization of its own plan. The individual thinks 
that he goes his own way and strives after his own ends. 
But unwittingly he contributes his share to the realiza- 
tion of the end Providence wants to attain. Such was 
the method of Kant. 2 It was restated by Hegel and later 
adopted by many Hegelians, among them by Marx. It 
was Hegel who coined the phrase "cunning of reason" 
(List der Vernunft) . 8 

There is no use arguing with doctrines derived from 
intuition. Every system of the philosophy of history is 
an arbitrary guess which can neither be proved nor dis- 
proved. There is no rational means available for either 
endorsing or rejecting a doctrine suggested by an inner 

2. Kant, Idee zu einer allgemeinen Geschichte in wetibiirgerlicher 
Ahsicht, Werke ( Inselausgabe, Leipzig, 1921), 1, 221-40. 

3. Hegel, Vorlesungen tiber die Philosophie der Weltgeschichte, 1, 


3. The Difference between the Point of View of 
History and That of Philosophy of History 

Before the eighteenth century most dissertations deal- 
ing with human history in general and not merely with 
concrete historical experience interpreted history from 
the point of view of a definite philosophy of history. 
This philosophy was seldom clearly defined and par- 
ticularized. Its tenets were taken for granted and im- 
plied in commenting on events. Only in the Age of En- 
lightenment did some eminent philosophers abandon 
the traditional methods of the philosophy of history and 
stop brooding about the hidden purpose of Providence 
directing the course of events. They inaugurated a new 
social philosophy, entirely different from what is called 
the philosophy of history. They looked upon human 
events from the point of view of the ends aimed at by 
acting men, instead of from the point of view of the 
plans ascribed to God or nature. 

The significance of this radical change in the ideo- 
logical outlook can best be illustrated by referring to 
Adam Smith's point of view. But in order to analyze the 
ideas of Smith we must first refer to Mandeville. 

The older ethical systems were almost unanimous in 
the condemnation of self-interest. They were ready to 
find the self-interest of the tillers of the soil pardonable 
and very often tried to excuse or even to glorify the 
kings' lust for aggrandisement. But they were adamant 
in their disapprobation of other people's craving for 


well-being and riches. Referring to the Sermon on the 
Mount, they exalted self-denial and indifference with 
regard to the treasures which moth and rust corrupt, 
and branded self-interest a reprehensible vice. Bernard 
de Mandeville in his Fable of the Bees tried to discredit 
this doctrine. He pointed out that self-interest and the 
desire for material well-being, commonly stigmatized as 
vices, are in fact the incentives whose operation makes 
for welfare, prosperity, and civilization. 

Adam Smith adopted this idea. It was not the object 
of his studies to develop a philosophy of history accord- 
ing to the traditional pattern. He did not claim to have 
guessed the goals which Providence has set for mankind 
and aims to realize by directing men's actions. He ab- 
stained from any assertions concerning the destiny of 
mankind and from any prognostication about the in- 
eluctable end of historical change. He merely wanted 
to determine and to analyze the factors that had been 
instrumental in man's progress from the straitened con- 
ditions of older ages to the more satisfactory conditions 
of his own age. It was from this point of view that he 
stressed the fact that "every part of nature, when atten- 
tively surveyed, equally demonstrates the providential 
care of its Author" and that "we may admire the wisdom 
and goodness of God, even in the weakness and folly of 
men." The rich, aiming at the "gratification of their 
own vain and insatiable desires," are "led by an in- 
visible hand" in such a way that they "without intend- 
ing it, without knowing it, advance the interest of so- 
ciety, and afford means for the multiplication of the 


species." * Believing in the existence of God, Smith could 
not help tracing back all earthly things to him and his 
providential care, just as later the Catholic Bastiat spoke 
of God's finger. 2 But in referring in this way to God 
neither of them intended to make any assertion about 
the ends God may want to realize in historical evolu- 
tion. The ends they dealt with in their writings were 
those aimed at by acting men, not by Providence. The 
pre-established harmony to which they alluded did not 
affect their epistemological principles and the methods 
of their reasoning. It was merely a means devised to 
reconcile the purely secular and mundane procedures 
they applied in their scientific efforts with their re- 
ligious beliefs. They borrowed this expedient from pious 
astronomers, physicists, and biologists who had resorted 
to it without deviating in their research from the em- 
pirical methods of the natural sciences. 

What made it necessary for Adam Smith to look for 
such a reconciliation was the fact that — like Mandeville 
before him — he could not free himself from the stand- 
ards and the terminology of traditional ethics that con- 
demned as vicious man's desire to improve his own ma- 
terial conditions. Consequently he was faced with a 
paradox. How can it be that actions commonly blamed 
as vicious generate effects commonly praised as bene- 
ficial? The utilitarian philosophers found the right an- 
swer. What results in benefits must not be rejected as 
morally bad. Only those actions are bad which produce 

1. Adam Smith, The Theory of Moral Sentiments, Pt. II, Sec. Ill, 
ch. 3, and Pt. IV, ch. 1 (Edinburgh, 1813), 1, 243, 419-20. 

2. Bastiat, Harmonies iconomiques (2d ed. Paris, 1851), p. 334. 


bad results. But the utilitarian point of view did not pre- 
vail. Public opinion still clings to pre-Mandevillian 
ideas. It does not approve of a businessman's success in 
supplying the customers with merchandise that best 
suits their wishes. It looks askance at wealth acquired in 
trade and industry, and finds it pardonable only if the 
owner atones for it by endowing charitable institutions. 

For the agnostic, atheistic, and antitheistic historians 
and economists there is no need to refer to Smith's and 
Bastiat's invisible hand. The Christian historians and 
economists who reject capitalism as an unfair system 
consider it blasphemous to describe egoism as a means 
Providence has chosen in order to attain its ends. Thus 
the theological views of Smith and Bastiat no longer 
have any meaning for our age. But it is not impossible 
that the Christian churches and sects will one day dis- 
cover that religious freedom can be realized only in a 
market economy and will stop supporting anticapital- 
istic tendencies. Then they will either cease to disap- 
prove of self-interest or return to the solution suggested 
by these eminent thinkers. 

Just as important as realizing the essential distinction 
between the philosophy of history and the new, purely 
mundane social philosophy which developed from the 
eighteenth century on is awareness of the difference 
between the stage-doctrine implied in almost every 
philosophy of history and the attempts of historians to 
divide the totality of historical events into various pe- 
riods or ages. 

In the context of a philosophy of history the various 
states or stages are, as has been mentioned already, 


intermediary stations on the way to a final stage which 
will fully realize the plan of Providence. For many 
Christian philosophies of history the pattern was set 
by the four kingdoms of the Book of Daniel. The 
modern philosophies of history borrowed from Daniel 
the notion of the final stage of human affairs, the notion 
of "an everlasting dominion, which shall not pass 
away." 3 However Hegel, Comte, and Marx may dis- 
agree with Daniel and with one another, they all accept 
this notion, which is an essential element in every phi- 
losophy of history. They announce either that the final 
stage has already been reached (Hegel), or that man- 
kind is just entering it (Comte), or that its coming is 
to be expected every day (Marx). 

The ages of history as distinguished by historians are 
of a different character. Historians do not claim to know 
anything about the future. They deal only with the past. 
Their periodization schemes aim at classifying historical 
phenomena without any presumption of forecasting 
future events. The readiness of many historians to press 
general history or special fields — like economic or social 
history or the history of warfare — into artificial sub- 
divisions has had serious drawbacks. It has been a 
handicap rather than an aid to the study of history. It 
was often prompted by political bias. Modern historians 
agree in paying little attention to such period schemes. 
But what counts for us is merely establishing the fact 
that the epistemological character of the periodization 
of history by historians is different from the stage 
schemes of the philosophy of history. 

3. Daniel 7:14. 


4. Philosophy of History and the Idea of God 

The three most popular pre-Darwinian } philosophies 
of history of the nineteenth century — those of Hegel, 
Comte, and Marx — were adaptations of the Enlighten- 
ment's idea of progress. And this doctrine of human 
progress was an adaptation of the Christian philosophy 
of salvation. 

Christian theology discerns three stages in human his- 
tory: the bliss of the age preceding the fall of man, the 
age of secular depravity, and finally the coming of the 
Kingdom of Heaven. If left alone, man would not be 
able to expiate the original sin and to attain salvation. 
But God in his mercy leads him to eternal life. In spite 
of all the frustrations and adversities of man's temporal 
pilgrimage, there is hope for a blessed future. 

The Enlightenment altered this scheme in order to 
make it agree with its scientific outlook. God endowed 
man with reason that leads him on the road toward 
perfection. In the dark past superstition and sinister 
machinations of tyrants and priests restrained the exer- 
cise of this most precious gift bestowed upon man. But 

1. The Marxian system of philosophy of history and dialectic ma- 
terialism was completed with the Preface, dated January 1859, of 
Zur Kritik der Politischen Oekonomie. Darwin's The Origin of Species 
appeared in the same year. Marx read it in the first part of Decem- 
ber 1860 and declared in letters to Engels and Lassalle that in spite 
of various shortcomings it provided a biological foundation ("natur- 
historische Grundlage" or "naturwissenschaftkche Unterlage") for his 
doctrine of the class struggle. Karl Marx, Chronik seines Lebens in 
Einzeldaten (Moscow, Marx-Engels-Lenin Institute, 1934), pp. 206, 


at last reason has burst its chains and a new age has 
been inaugurated. Henceforth every generation will 
surpass its predecessors in wisdom, virtue, and success 
in improving earthly conditions. Progress toward per- 
fection will continue forever. Reason, now emancipated 
and put in its right place, will never again be relegated 
to the unseemly position the dark ages assigned to it. 
All "reactionary" ventures of obscurantists are doomed 
to failure. The trend toward progress is irresistible. 

Only in the doctrines of the economists did the notion 
of progress have a definite, unambiguous meaning. All 
men are striving after survival and after improvement 
of the material conditions of their existence. They want 
to live and to raise their standard of living. In employ- 
ing the term "progress" the economist abstains from 
expressing judgments of value. He appraises things 
from the point of view of acting men. He calls better 
or worse what appears as such in their eyes. Thus capi- 
talism means progress since it brings about progressive 
improvement of the material conditions of a continually 
increasing population. It provides people with some sat- 
isfactions which they did not get before and which 
gratify some of their aspirations. 

But to most of the eighteenth-century champions of 
meliorism this "mean, materialistic" content of the econ- 
omists' idea of progress was repulsive. They nurtured 
vague dreams of an earthly paradise. Their ideas about 
the conditions of man in this paradise were rather nega- 
tive than affirmative. They pictured a state of affairs free 
of all those things which they found unsatisfactory in 
their environment: no tyrants, no oppression or perse- 


cution, no wars, no poverty, no crime; liberty, equality, 
and fraternity; all men happy, peacefully united, and 
cooperating in brotherly love. As they assumed that 
nature is bountiful and all men were good and reason- 
able, they could see no cause for the existence of all 
that they branded evil but inherent deficiencies in man- 
kind's social and political organization. What was 
needed was a constitutional reform that would substi- 
tute good laws for bad laws. All who opposed this re- 
form dictated by reason were considered hopelessly de- 
praved individuals, enemies of the common weal, whom 
the good people were bound to annihilate physically. 

The main defect of this doctrine was its incompre- 
hension of the liberal program as developed by the econ- 
omists and put into effect by the harbingers of capital- 
istic private enterprise. The disciples of Jean Jacques 
Rousseau who raved about nature and the blissful con- 
dition of man in the state of nature did not take notice 
of the fact that the means of subsistence are scarce and 
that the natural state of man is extreme poverty and in- 
security. They disparaged as greed and predatory sel- 
fishness the businessmen's endeavors to remove need 
and want so far as possible. Witnesses to the inaugura- 
tion of new ways of economic management that were 
destined to provide unprecedented improvement in the 
standard of living for an unprecedented increase of 
population, they indulged in daydreams about a return 
to nature or to the alleged virtuous simplicity of early 
republican Rome. While manufacturers were busy im- 
proving the methods of production and turning out 
more and better commodities for the consumption of 


the masses, the followers of Rousseau perorated about 
reason and virtue and liberty. 

It is vain to talk about progress pure and simple. One 
must first clearly designate the goal one has chosen to 
attain. Only then is it permissible to call an advance 
on the way that leads to this goal progress. The philos- 
ophers of the Enlightenment entirely failed in this re- 
gard. They did not say anything definite about the char- 
acteristics of the goal they had in mind. They only 
glorified this insufficiently described goal as the state 
of perfection and the realization of all that is good. 
But they were rather hazy in employing the epithets 
perfect and good. 

As against the pessimism of ancient and modern au- 
thors who had described the course of human history as 
the progressive deterioration of the perfect conditions 
of the fabulous golden age of the past, the Enlighten- 
ment displayed an optimistic view. As has been pointed 
out above, its philosophers derived their belief in the 
inevitability of progress toward perfection from the con- 
fidence they placed in man's reason. By dint of his rea- 
son man leams more and more from experience. Every 
new generation inherits a treasure of wisdom from its 
forbears and adds something to it. Thus the descendents 
necessarily surpass their ancestors. 

It did not occur to the champions of this idea that 
man is not infallible and that reason can err in the 
choice both of the ultimate goal to be aimed at and 
of the means to be resorted to for its attainment. Their 
theistic faith implied faith in the goodness of almighty 
Providence that will guide mankind along the right 


path. Their philosophy had eliminated the Incarnation 
and all the other Christian dogmas but one: salvation. 
God's magnificence manifested itself in the fact that 
the work of his creation was necessarily committed to 
progressive improvement. 

Hegel's philosophy of history assimilated these ideas. 
Reason (Vernunft) rules the world, and this cognition 
is tantamount to the insight that Providence rules it. 
The task of philosophy of history is to discern the plans 
of Providence. 2 The ultimate foundation of the opti- 
mism that Hegel displayed with regard to the course 
of historical events and the future of mankind was his 
firm faith in God's infinite goodness. God is genuine 
goodness. "The cognition of philosophy is that no power 
surpasses the might of the good, i.e., God, and could pre- 
vent God from asserting himself, that God is right at the 
last, that human history is nothing else than the plan of 
Providence. God rules the world; the content of his 
government, the realization of his plan, is the history of 
mankind." 3 

In the philosophy of Comte as well as in that of Marx 
there is no room left for God and his infinite goodness. 
In the system of Hegel it made sense to speak of a nec- 
essary progress of mankind from less to more satisfac- 
tory conditions. God had decided that every later stage 
of human affairs should be a higher and better stage. 
No other decision could be expected from the almighty 
and infinitely good Lord. But the atheists Comte and 

2. Hegel, Vorlesungen iiber die Philosophic der Weltgeschichte, 1, 
4, 17-18. 

3. Ibid., p. 55. 


Marx should not have simply assumed that the march 
of time is necessarily a march toward ever better condi- 
tions and will eventually lead to a perfect state. It was 
up to them to prove that progress and improvement are 
inevitable and a relapse into unsatisfactory conditions 
impossible. But they never embarked upon such a dem- 

If for the sake of argument one were prepared to ac- 
quiesce in Marx's arbitrary prediction that society is 
moving "with the inexorability of a law of nature" to- 
ward socialism, it would still be necessary to examine 
the question whether socialism can be considered as a 
workable system of society's economic organization and 
whether it does not rather mean the disintegration of 
social bonds, the return to primitive barbarism, and 
poverty and starvation for all. 

The purpose of Marx's philosophy of history was to 
silence the critical voices of the economists by pointing 
out that socialism was the next and final stage of the 
historical process and therefore a higher and better 
stage than the preceding stages; that it was even the 
final state of human perfection, the ultimate goal of 
human history. But this conclusion was a non sequitur 
in the frame of a godless philosophy of history. The 
idea of an irresistible trend toward salvation and the 
establishment of a perfect state of everlasting bliss is 
an eminently theological idea. In the frame of a system 
of atheism it is a mere arbitrary guess, deprived of any 
sense. There is no theology without God. An atheistic 
system of philosophy of history must not base its opti- 


mism upon confidence in the infinite goodness of God 

5. Activistic Determinism and 
Fatalistic Determinism 

Every philosophy of history is an instance of the pop- 
ular idea, mentioned above, 1 that all future events are 
recorded in advance in the great book of fate. A special 
dispensation has allowed the philosopher to read pages 
of this book and to reveal their content to the unini- 

This brand of determinism inherent in a philosophy 
of history must be distinguished from the type of deter- 
minism that guides man's actions and search for knowl- 
edge. The latter type — we may call it activistic deter- 
minism — is the outgrowth of the insight that every 
change is the result of a cause and that there is a regu- 
larity in the concatenation of cause and effect. However 
unsatisfactory the endeavors of philosophy to throw 
light upon the problem of causality may have been 
hitherto, it is impossible for the human mind to think of 
uncaused change. Man cannot help assuming that every 
change is caused by a preceding change and causes 
further change. Notwithstanding all the doubts raised 
by the philosophers, human conduct is entirely and in 
every sphere of life — action, philosophy and science 
— directed by the category of causality. The lesson 
brought home to man by activistic determinism is: If 

1. See above, p. 79. 


you want to attain a definite end, you must resort to 
the appropriate means; there is no other way to success. 

But in the context of a philosophy of history deter- 
minism means: This will happen however much you 
may try to avoid it. While activistic determinism is a 
call to action and the utmost exertion of a man's physi- 
cal and mental capacities, this type of determinism — we 
may call it fatalistic determinism — paralyzes the will 
and engenders passivity and lethargy. As has been 
pointed out, 2 it is so contrary to the innate impulse to- 
ward activity that it never could really get hold of the 
human mind and prevent people from acting. 

In depicting the history of the future the philosopher 
of history as a rule restricts himself to describing big- 
scale events and the final outcome of the historical 
process. He thinks that this limitation distinguishes his 
guesswork from the augury of common soothsayers who 
dwell upon details and unimportant little things. Such 
minor events are in his view contingent and unpredicta- 
ble. He does not bother about them. His attention is ex- 
clusively directed toward the great destiny of the whole, 
not to the trifle which, as he thinks, does not matter. 

However, the historical process is the product of all 
these small changes going on ceaselessly. He who claims 
to know the final end must necessarily know them too. 
He must either take them all in at a glance with all their 
consequences or be aware of a principle that inevitably 
directs their result to a preordained end. The arrogance 
with which a writer elaborating his system of philosophy 
of history looks down upon the small fry of palmists 

2. See above, pp. 79 ff. 


and crystal gazers is therefore hardly different from the 
haughtiness which in precapitalistic times wholesalers 
displayed toward retailers and peddlers. What he sells 
is essentially the same questionable wisdom. 

Activistic determinism is by no means incompatible 
with the — rightly understood — idea of freedom of the 
will. It is, in fact, the correct exposition of this often 
misinterpreted notion. Because there is in the universe a 
regularity in the concatenation and sequence of phe- 
nomena, and because man is capable of acquiring 
knowledge about some of these regularities, human 
action becomes possible within a definite margin. Free 
will means that man can aim at definite ends because 
he is familiar with some of the laws determining the 
flux of world affairs. There is a sphere within which 
man can choose between alternatives. He is not, like 
other animals, inevitably and irremediably subject to 
the operation of blind fate. He can, within definite nar- 
row limits, divert events from the course they would 
take if left alone. He is an acting being. In this consists 
his superiority to mice and microbes, plants and stones. 
In this sense he applies the — perhaps inexpedient and 
misleading — term "free will." 

The emotional appeal of the cognizance of this free- 
dom, and the idea of moral responsibility which it 
engenders, are as much facts as anything else called by 
that name. Comparing himself with all other beings, 
man sees his own dignity and superiority in his will. 
The will is unbendable and must not yield to any 
violence and oppression, because man is capable of 
choosing between life and death and of preferring 


death if life can be preserved only at the price of sub- 
mitting to unbearable conditions. Man alone can die for 
a cause. It was this that Dante had in mind: "Che 
volonta, se non vuol, non s'ammorza." 3 

One of the fundamental conditions of man's existence 
and action is the fact that he does not know what will 
happen in the future. The exponent of a philosophy of 
history, arrogating to himself the omniscience of God, 
claims that an inner voice has revealed to him knowl- 
edge of things to come. 

3. Dante, Paradiso, TV, 76: "The will does not die if it does not 


Chapter 9. The Concept of Historical Individuality 

1. The Ultimate Given of History 

The human search for knowledge cannot go on end- 
lessly. Inevitably, sooner or later, it will reach a point 
beyond which it cannot proceed. It will then be faced 
with an ultimate given, a datum that man's reason can- 
not trace back to other data. In the course of the evolu- 
tion of knowledge science has succeeded in tracing 
back to other data some things and events which pre- 
viously had been viewed as ultimate. We may expect 
that this will also occur in the future. But there will al- 
ways remain something that is for the human mind an 
ultimate given, unanalyzable and irreducible. Human 
reason cannot even conceive a kind of knowledge that 
would not encounter such an insurmountable obstacle. 
There is for man no such thing as omniscience. 

In dealing with such ultimate data history refers to 
individuality. The characteristics of individual men, 
their ideas and judgments of value as well as the actions 
guided by those ideas and judgments, cannot be traced 
back to something of which they would be the deriva- 
tives. There is no answer to the question why Frederick 
II invaded Silesia except: because he was Frederick II. 
It is customary, although not very expedient, to call the 
mental process by means of which a datum is traced 
back to other data rational. Then an ultimate datum is 



called irrational. No historical research can be thought 
of that would not ultimately meet such irrational facts. 

Philosophies of history claim to avoid referring to in- 
dividuality and irrationality. They pretend to provide a 
thorough-going interpretation of all historical events. 
What they really do is relegate the ultimate given to 
two points of their scheme, to its supposed beginning 
and its supposed end. They assume that there is at the 
start of history an unanalyzable and irreducible agency, 
for example Geist in the system of Hegel or the material 
productive forces in that of Marx. And they further 
assume that this prime mover of history aims at a 
definite end, also unanalyzable and irreducible, for in- 
stance the Prussian state of about 1825 or socialism. 
Whatever one may think about the various systems of 
philosophy of history, it is obvious that they do not 
eliminate reference to individuality and irrationality. 
They merely shift it to another point of their interpreta- 

Materialism wants to throw history overboard en- 
tirely. All ideas and actions should be explained as the 
necessary outcome of definite physiological processes. 
But this would not make it possible to reject any ref- 
erence to irrationality. Like history, the natural sciences 
are ultimately faced with some data defying any further 
reduction to other data, that is, with something ulti- 
mately given. 

2. The Role of the Individual in History 

In the context of a philosophy of history there is no 
room left for any reference to individuality other than 


that of the prime mover and his plan determining the 
way events must go. All individual men are merely tools 
in the hand of ineluctable destiny. Whatever they may 
do, the outcome of their actions must necessarily fit into 
the preordained plan of Providence. 

What would have happened if Lieutenant Napoleon 
Bonaparte had been killed in action at Toulon? Friedrich 
Engels knew the answer: "Another would have filled the 
place." For "the man has always been found as soon as he 
became necessary." 1 Necessary for whom and for what 
purpose? Obviously for the material productive forces to 
bring about, at a later date, socialism. It seems that the 
material productive forces always have a substitute at 
hand, just as a cautious opera manager has an understudy 
ready to sing the tenor's part in case the star should 
catch a cold. If Shakespeare had died in infancy, an- 
other man would have written Hamlet and the Sonnets. 
But, some people ask, how did this surrogate while 
away his time since Shakespeare's good health relieved 
him from this chore? 

The issue has been purposely obfuscated by the 
champions of historical necessity, who confused it with 
other problems. 

Looking backward upon the past, the historian must 
say that, all conditions having been as they were, every- 
thing that happened was inevitable. At any instant the 
state of affairs was the necessary consequence of the 
immediately preceding state. But among the elements 
determining any given state of historical affairs there 

1. Letter to Starkenburg, Jan. 25, 1894, Karl Marx and Friedrich 
Engels, Correspondence 1846-1895 (London, M. Lawrence, Ltd., 
1934), p. 518. 


are factors that cannot be traced back further than to 
the point at which the historian is faced with the ideas 
and actions of individuals. 

When the historian says that the French Revolution 
of 1789 would not have happened if some things had 
been different, he is merely trying to establish the forces 
that brought about the event and the influence of each 
of these forces. Taine did not indulge in idle specula- 
tions as to what would have happened if the doctrines 
that he called X esprit revolutionnaire and Vesprit clas- 
sique had not been developed. He wanted to assign to 
each of them its relevance in the chain of events that 
resulted in the outbreak and the course of the Revolu- 
tion. 2 

A second confusion concerns the limits drawn upon 
the influence of great men. Simplified accounts of his- 
tory, adapted to the capacity of people slow of compre- 
hension, have presented history as a product of the feats 
of great men. The older Hohenzollern made Prussia, 
Bismarck made the Second Reich, William II ruined it, 
Hitler made and ruined the Third Reich. No serious 
historian ever shared in such nonsense. It has never 
been contested that the part played even by the greatest 
figures of history was much more moderate. Every man, 
whether great or small, lives and acts within the frame 
of his age's historical circumstances. These circum- 
stances are determined by all the ideas and events of 
the preceding ages as well as by those of his own age. 
The Titan may outweigh each of his contemporaries; 

2. Taine, Les Origines de la France contemporaine, 1, Bk. Ill 
(16th ed. Paris, 1887), 221-328. 


he is no match for the united forces of the dwarfs. A 
statesman can succeed only insofar as his plans are ad- 
justed to the climate of opinion of his time, that is to 
the ideas that have got hold of his fellows' minds. He 
can become a leader only if he is prepared to guide 
people along the paths they want to walk and toward 
the goal they want to attain. A statesman who antago- 
nizes public opinion is doomed to failure. No matter 
whether he is an autocrat or an officer of a democracy, 
the politician must give the people what they wish to 
get, very much as a businessmanraust supply the cus- 
tomers with the things they wish to acquire. 

It is different with the pioneers of new ways of think- 
ing and new modes of art and literature. The path- 
breaker who disdains the applause he may get from the 
crowd of his contemporaries does not depend on his 
own age's ideas. He is free to say with Schiller's Marquis 
Posa: "This century is not ripe for my ideas; I live as a 
citizen of centuries to come." The genius' work too is 
embedded in the sequence of historical events, is condi- 
tioned by the achievements of preceding generations, 
and is merely a chapter in the evolution of ideas. But it 
adds something new and unheard of to the treasure 
of thoughts and may in this sense be called creative. 
The genuine history of mankind is the history of ideas. 
It is ideas that distinguish man from all other beings. 
Ideas engender social institutions, political changes, 
technological methods of production, and all that is 
called economic conditions. And in searching for their 
origin we inevitably come to a point at which all that 
can be asserted is that a man had an idea. Whether the 


name of this man is known or not is of secondary im- 

This is the meaning that history attaches to the notion 
of individuality. Ideas are the ultimate given of histor- 
ical inquiry. All that can be said about ideas is that 
they came to pass. The historian may point out how a 
new idea fitted into the ideas developed by earlier gen- 
erations and how it may be considered a continuation 
of these ideas and their logical sequel. New ideas do 
not originate in an ideological vacuum. They are called 
forth by the previously existing ideological structure; 
they are the response offered by a man's mind to the 
ideas developed by his predecessors. But it is an arbi- 
trary surmise to assume that they were bound to come 
and that if A had not generated them a certain B or C 
would have performed the job. 

In this sense what the limitations of our knowledge 
induce us to call chance plays a part in history. If Aris- 
totle had died in childhood, intellectual history would 
have been affected. If Bismarck had died in 1860, world 
affairs would have taken a different course. To what ex- 
tent and with what consequences nobody can know. 

3. The Chimera of the Group Mind 

In their eagerness to eliminate from history any ref- 
erence to individuals and individual events, collectivist 
authors resorted to a chimerical construction, the group 
mind or social mind. 

At the end of the eighteenth and beginning of 
the nineteenth centuries German philologists began to 


study German medieval poetry, which had long since 
fallen into oblivion. Most of the epics they edited from 
old manuscripts were imitations of French works. The 
names of their authors — most of them knightly warriors 
in the service of dukes or counts — were known. These 
epics were not much to boast of. But there were two 
epics of a quite different character, genuinely original 
works of high literary value, far surpassing the conven- 
tional products of the courtiers: the Nibelungenlied and 
the Gudrun. The former is one of the great books of 
world literature and undoubtedly the outstanding poem 
Germany produced before the days of Goethe and 
Schiller. The names of the authors of these master- 
pieces were not handed down to posterity. Perhaps 
the poets belonged to the class of professional enter- 
tainers (Spielleute) , who not only were snubbed by the 
nobility but had to endure mortifying legal disabilities. 
Perhaps they were heretical or Jewish, and the clergy 
was eager to make people forget them. At any rate the 
philologists called these two works "people's epics'* 
(Volksepen) . This term suggested to naive minds the 
idea that they were written not by individual authors 
but by the "people." The same mythical authorship was 
attributed to popular songs (Volkslieder) whose au- 
thors were unknown. 

Again in Germany, in the years following the Napo- 
leonic wars, the problem of comprehensive legislative 
codification was brought up for discussion. In this con- 
troversy the historical school of jurisprudence, led by 
Savigny, denied the competence of any age and any 
persons to write legislation. Like the Volksepen and the 


Volkslieder, a nation's laws, they declared, are a spon- 
taneous emanation of the Volksgeist, the nation's spirit 
and peculiar character. Genuine laws are not arbitrarily 
written by legislators; they spring up and thrive organ- 
ically from the Volksgeist. 

This Volksgeist doctrine was devised in Germany 
as a conscious reaction against the ideas of natural law 
and the "un-German" spirit of the French Revolution. 
But it was further developed and elevated to the dig- 
nity of a comprehensive social doctrine by the French 
positivists, many of whom not only were committed to 
the principles of the most radical among the revolu- 
tionary leaders but aimed at completing the "unfin- 
ished revolution" by a violent overthrow of the capital- 
istic mode of production. Emile Durkheim and his 
school deal with the group mind as if it were a real phe- 
nomenon, a distinct agency, thinking and acting. As 
they see it, not individuals but the group is the subject 
of history. 

As a corrective of these fancies the truism must be 
stressed that only individuals think and act. In dealing 
with the thoughts and actions of individuals the histo- 
rian establishes the fact that some individuals influence 
one another in their thinking and acting more strongly 
than they influence and are influenced by other indi- 
viduals. He observes that cooperation and division of 
labor exist among some, while existing to a lesser extent 
or not at all among others. He employs the term "group" 
to signify an aggregation of individuals who cooperate 
together more closely. However, the distinction of 
groups is optional. The group is not an ontological en- 


tity like the biological species. The various group con- 
cepts intersect one another. The historian chooses, ac- 
cording to the special plan of his studies, the features 
and attributes that determine the classification of indi- 
viduals into various groups. The grouping may integrate 
people speaking the same language or professing the 
same religion or practicing the same vocation or occu- 
pation or descended from the same ancestry. The group 
concept of Gobineau was different from that of Marx. 
In short, the group concept is an ideal type and as such 
is derived from the historian's understanding of the 
historical forces and events. 

Only individuals think and act. Each individual's 
thinking and acting is influenced by his fellows' think- 
ing and acting. These influences are variegated. The 
individual American's thoughts and conduct cannot be 
interpreted if one assigns him to a single group. He is 
not only an American but a member of a definite reli- 
gious group or an agnostic or an atheist; he has a job, 
he belongs to a political party, he is affected by tradi- 
tions inherited from his ancestors and conveyed to him 
by his upbringing, by the family, the school, the neigh- 
borhood, by the ideas prevailing in his town, state, and 
country. It is an enormous simplification to speak of 
the American mind. Every American has his own mind. 
It is absurd to ascribe any achievements and virtues or 
any misdeeds and vices of individual Americans to 
America as such. 

Most people are common men. They do not have 
thoughts of their own; they are only receptive. They 
do not create new ideas; they repeat what they have 


heard and imitate what they have seen. If the world 
were peopled only by such as these, there would not 
be any change and any history. What produces change 
is new ideas and actions guided by them. What distin- 
guishes one group from another is the effect of such in- 
novations. These innovations are not accomplished by 
a group mind; they are always the achievements of in- 
dividuals. What makes the American people different 
from any other people is the joint effect produced by 
the thoughts and actions of innumerable uncommon 

We know the names of the men who invented and 
step by step perfected the motorcar. A historian can 
write a detailed history of the evolution of the automo- 
bile. We do not know the names of the men who, in the 
beginnings of civilization, made the greatest inventions 
— for example lighting a fire. But this ignorance does 
not permit us to ascribe this fundamental invention to 
a group mind. It is always an individual who starts a 
new method of doing things, and then other people imi- 
tate his example. Customs and fashions have always 
been inaugurated by individuals and spread through 
imitation by other people. 

While the group-mind school tried to eliminate the 
individual by ascribing activity to the mythical Volks- 
geist, the Marxians were intent on the one hand upon 
depreciating the individual's contribution and on the 
other hand upon crediting innovations to common men. 
Thus Marx observed that a critical history of technology 
would demonstrate that none of the eighteenth cen- 
tury's inventions was the achievement of a single indi- 


vidual. 1 What does this prove? Nobody denies that tech- 
nological progress is a gradual process, a chain of suc- 
cessive steps performed by long lines of men each of 
whom adds something to the accomplishments of his 
predecessors. The history of every technological con- 
trivance, when completely told, leads back to the most 
primitive inventions made by cave dwellers in the ear- 
liest ages of mankind. To choose any later starting point 
is an arbitrary restriction of the whole tale. One may 
begin a history of wireless telegraphy with Maxwell 
and Hertz, but one may as well go back to the first ex- 
periments with electricity or to any previous techno- 
logical feats that had necessarily to precede the con- 
struction of a radio network. All this does not in the 
least affect the truth that each step forward was made 
by an individual and not by some mythical impersonal 
agency. It does not detract from the contributions of 
Maxwell, Hertz, and Marconi to admit that they could 
be made only because others had previously made other 

To illustrate the difference between the innovator 
and the dull crowd of routinists who cannot even im- 
agine that any improvement is possible, we need only 
refer to a passage in Engels' most famous book. 2 Here, 
in 1878, Engels apodictically announced that military 
weapons are "now so perfected that no further progress 
of any revolutionizing influence is any longer possible." 
Henceforth "all further [technological] progress is by 

1. Das Kapital, 1, 335, n. 89. 

2. Herm Eugen Diihrings Umwiilzung der Wissenschaft, 7th ed. 
Stuttgart, 1910. 


and large indifferent for land warfare. The age of evo- 
lution is in this regard essentially closed." 8 This com- 
placent conclusion shows in what the achievement of 
the innovator consists: he accomplishes what other peo- 
ple believe to be unthinkable and unfeasible. 

Engels, who considered himself an expert in the art 
of warfare, liked to exemplify his doctrines by referring 
to strategy and tactics. Changes in military tactics, he 
declared, are not brought about by ingenious army 
leaders. They are achievements of privates who are 
usually cleverer than their officers. The privates invent 
them by dint of their instincts (instinktmassig) and put 
them into operation in spite of the reluctance of their 
commanders. 4 

Every doctrine denying to the "single paltry individ- 
ual" 5 any role in history must finally ascribe changes 
and improvements to the operation of instincts. As those 
upholding such doctrines see it, man is an animal that 
has the instinct to produce poems, cathedrals, and air- 
planes. Civilization is the result of an unconscious and 
unpremeditated reaction of man to external stimuli. 
Each achievement is the automatic creation of an in- 
stinct with which man has been endowed especially for 
this purpose. There are as many instincts as there are 
human achievements. It is needless to enter into a 
critical examination of this fable invented by impotent 
people for slighting the achievements of better men 

3. Ibid., pp. 176-7. 

4. Ibid., pp. 172-6. 

5. Engels, Der Ursprung der Fomilie, des Privateigentums und des 
Staates (6th ed. Stuttgart, 1894), p. 186. 


and appealing to the resentment of the dull. Even on 
the basis of this makeshift doctrine one cannot negate 
the distinction between the man who had the instinct 
to write the book On the Origin of Species and those 
who lacked this instinct. 

4. Planning History 

Individuals act in order to bring about definite re- 
sults. Whether they succeed or not depends on the suit- 
ability of the means applied and the response their ac- 
tions encounter on the part of fellow individuals. Very 
often the outcome of an action differs considerably from 
what the actor was eager to achieve. The margin within 
which a man, however great, can act successfully is 
narrow. No man can through his actions direct the 
course of affairs for more than a comparatively short 
period of the future, still less for all time to come. 

Yet every action adds something to history, affects 
the course of future events, and is in this sense a his- 
torical fact. The most trivial performance of daily rou- 
tine by dull people is no less a historical datum than is 
the most startling innovation of the genius. The aggre- 
gate of the unvarying repetition of traditional modes of 
acting determines, as habits, customs and mores, the 
course of events. The common man's historical role con- 
sists in contributing a particle to the structure of the 
tremendous power of consuetude. 

History is made by men. The conscious intentional 
actions of individuals, great and small, determine the 
course of events insofar as it is the result of the inter- 


action of all men. But the historical process is not de- 
signed by individuals. It is the composite outcome of 
the intentional actions of all individuals. No man can 
plan history. All he can plan and try to put into effect 
is his own actions which, jointly with the actions of 
other men, constitute the historical process. The Pilgrim 
Fathers did not plan to found the United States. 

Of course, there have always been men who planned 
for eternity. For the most part the failure of their de- 
signs appeared very soon. Sometimes their construc- 
tions lasted quite a while, but their effect was not what 
the builders had planned. The monumental tombs of 
the Egyptian kings still exist, but it was not the inten- 
tion of their builders to make modern Egypt attractive 
for tourists and to supply present-day museums with 
mummies. Nothing demonstrates more emphatically the 
temporal limitations on human planning than the ven- 
erable ruins scattered about the surface of the earth. 

Ideas live longer than walls and other material arti- 
facts. We still enjoy the masterpieces of the poetry and 
philosophy of ancient India and Greece. But they do 
not mean for us what they meant to their authors. We 
may wonder whether Plato and Aristotle would have 
approved of the use later ages have made of their 

Planning for eternity, to substitute an everlasting 
state of stability, rigidity, and changelessness for histor- 
ical evolution, is the theme of a special class of litera- 
ture. The Utopian author wants to arrange future condi- 
tions according to his own ideas and to deprive the rest 
of mankind once and for all of the faculty to choose 
and to act. One plan alone, viz., the authors plan, 


should be executed and all other people be silenced. 
The author, and after his death his successor, will 
henceforth alone determine the course of events. There 
will no longer be any history, as history is the composite 
effect of the interaction of all men. The superhuman 
dictator will rule the universe and reduce all other peo- 
ple to pawns in his plans. He will deal with them as 
the engineer deals with the raw materials out of which 
he builds, a method pertinently called social engi- 

Such projects are very popular nowadays. They en- 
rapture the intellectuals. A few skeptics observe that 
their execution is contrary to human nature. But their 
supporters are confident that by suppressing all dis- 
senters they can alter human nature. Then people will 
be as happy as the ants are supposed to be in their hills. 

The essential question is: Will all men be prepared 
to yield to the dictator? Will nobody have the ambition 
to contest his supremacy? Will nobody develop ideas at 
variance with those underlying the dictator's plan? Will 
all men, after thousands of years of "anarchy" in think- 
ing and acting, tacitly submit to the tyranny of one or a 
few despots? 

It is possible that in a few years all nations will have 
adopted the system of all-round planning and totali- 
tarian regimentation. The number of opponents is very 
small, and their direct political influence almost nil. 
But even a victory of planning will not mean the end 
of history. Atrocious wars among the candidates for the 
supreme office will break out. Totalitarianism may wipe 
out civilization, even the whole of the human race. 
Then, of course, history will have come to its end too. 

Chapter 10. Historicism 

1. The Meaning of Historicism 

Historicism developed from the end of the eight- 
eenth century on as a reaction against the social phi- 
losophy of rationalism. To the reforms and policies ad- 
vocated by various authors of the Enlightenment it 
opposed a program of preservation of existing institu- 
tions and, sometimes, even of a return to extinct insti- 
tutions. Against the postulates of reason it appealed to 
the authority of tradition and the wisdom of ages gone 
by. The main target of its critique was the ideas that 
had inspired the American and the French Revolutions 
and kindred movements in other countries. Its cham- 
pions proudly called themselves antirevolutionary and 
emphasized their rigid conservatism. But in later years 
the political orientation of historicism changed. It be- 
gan to regard capitalism and free trade — both domestic 
and international — as the foremost evil, and joined 
hands with the "radical" or "leftist" foes of the market 
economy, aggressive nationalism on the one hand and 
revolutionary socialism on the other. As far as histori- 
cism still has actual political importance, it is ancillary 
to socialism and to nationalism. Its conservatism has 
almost withered away. It survives only in the doctrines 
of some religious groups. 

People have again and again stressed the congenial- 
ity of historicism and artistic and literary romanticism. 



The analogy is rather superficial. Both movements had 
in common a taste for the conditions of ages gone by 
and an extravagant overestimation of old customs and 
institutions. But this enthusiasm for the past is not the 
essential feature of historicism. Historicism is first of all 
an epistemological doctrine and must be viewed as 

The fundamental thesis of historicism is the proposi- 
tion that, apart from the natural sciences, mathematics, 
and logic, there is no knowledge but that provided by 
history. There is no regularity in the concatenation and 
sequence of phenomena and events in the sphere of 
human action. Consequently the attempts to develop 
a science of economics and to discover economic laws 
are vain. The only sensible method of dealing with hu- 
man action, exploits, and institutions is the historical 
method. The historian traces every phenomenon back 
to its origins. He depicts the changes going on in human 
affairs. He approaches his material, the records of the 
past, without any prepossessions and preconceived 
ideas. The historian utilizes sometimes, in preliminary, 
merely technical, and ancillary examination of these 
sources, the results of the natural sciences, as for in- 
stance in determining the age of the material on which 
a document of disputed authenticity is written. But in 
his proper field, the exposition of past events, he does 
not rely upon any other branch of knowledge. The 
standards and general rules to which he resorts in deal- 
ing with the historical material are to be abstracted 
from this very material. They must not be borrowed 
from any other source. 


The extravagance of these claims was later reduced 
to a more modest measure when Dilthey stressed the 
role psychology plays in the work of the historian. 1 The 
champions of historicism accepted this restriction and 
did not insist on their extreme description of the histor- 
ical method. They were merely interested in the con- 
demnation of economics and had no quarrel with psy- 

If the historicists had been consistent, they would 
have substituted economic history for the — in their 
opinion counterfeit — science of economics. (We may 
pass over the question how economic history could be 
treated without economic theory.) But this would not 
have served their political plans. What they wanted 
was to propagandize for their interventionist or socialist 
programs. The wholesale rejection of economics was 
only one item in their strategy. It relieved them from 
the embarrassment created by their inability to explode 
the economists' devastating critique of socialism and 
interventionism. But it did not in itself demonstrate 
the soundness of a prosocialist or interventionist policy. 
In order to justify their "unorthodox" leanings, the his- 
toricists developed a rather self -contradictory discipline 
to which various names were given such as realistic 
or institutional or ethical economics, or the economic 
aspects of political science (wirtschaftliche Staatswis- 
senschaften) , 2 

1. See below, p. 312. 

2. For various other names suggested see Arthur Spiethoff in the 
Preface to the English edition of his treatise on "Business Cycles," 
International Economic Papers, No. 3 (New York, 1953), p. 75. 


Most champions of these schools of thought did not 
bother about an epistemological explanation of their 
procedures. Only a few tried to justify their method. 
We may call their doctrine periodalism and their sup- 
porters periodalists. 

The main idea underlying all these attempts to con- 
struct a quasi-economic doctrine that could be em- 
ployed to justify policies fighting the market economy 
was borrowed from positivism. As historicists the peri- 
odalists talked indefatigably about something they 
called the historical method, and claimed to be histor- 
ians. But they adopted the essential tenets of positiv- 
ism, which rejected history as useless and meaningless 
chatter, and wanted to inaugurate in its place a new 
science to be modeled after the pattern of Newtonian 
mechanics. The periodalists accepted the thesis that it 
is possible to derive from historical experience a pos- 
teriori laws which, once they are discovered, will form 
a new — not yet existing — science of social physics or 
sociology or institutional economics. 

Only in one regard did the periodalists' version of 
this thesis differ from that of the positivists. The posi- 
tivists had laws in mind that would be valid universally. 
The periodalists believed that every period of history 
has its own economic laws different from those of other 
periods of economic history. 

The periodalists distinguish various periods in the 
course of historical events. Obviously the criterion ac- 
cording to which this distinction is made is the charac- 
teristics of the economic laws determining economic 
becoming in each period. Thus the periodalists' argu- 


ment moves in a circle. The periodization of economic 
history presupposes knowledge of the economic laws 
peculiar to each period, while these laws can only be 
discovered by examining each period without any ref- 
erence to the events that happened in other periods. 

The periodalists' image of the course of history is 
this: There are various periods or stages of economic 
evolution succeeding one another according to a defi- 
nite order; throughout each of these periods the eco- 
nomic laws remain unchanged. Nothing is said about 
the transition from one period to the next one. If we 
assume that it is not brought about at one blow, we 
must assume that between two periods there is an in- 
terval of transition, a transition period as it were. What 
happens in this interval? What kind of economic laws 
are operative in it? Is it a time of lawlessness or has it 
its own laws? Besides, if one assumes that the laws of 
economic becoming are historical facts and therefore 
changing in the flux of historical events, it is manifestly 
contradictory to assert that there are periods in which 
there is no change, i.e., periods in which there is no his- 
tory, and that between two such periods of rest there 
is a period of transition. 

The same fallacy is also implied in the concept of a 
present age as resorted to by contemporary pseudo 
economics. Studies dealing with the economic history 
of the recent past are mislabeled as dealing with pres- 
ent economic conditions. If we refer to a definite length 
of time as the present, we mean that in regard to a 
special issue conditions remain unchanged throughout 
this period. The concept of the present is therefore dif- 


ferent for various fields of action. 8 Besides, it is never 
certain how long this absence of change will last and 
consequently how much of the future has to be in- 
cluded. What a man can say about the future is always 
merely speculative anticipation. Dealing with some 
conditions of the recent past under the heading "present 
conditions" is a misnomer. The most that can be said 
is: Such were the conditions yesterday; we expect they 
will remain unchanged for some time to come. 

Economics deals with a regularity in the concatena- 
tion and sequence of phenomena that is valid in the 
whole field of human action. It can therefore contribute 
to the elucidation of future events; it can predict within 
the limits drawn to praxeological prediction. 4 If one 
rejects the idea of an economic law necessarily valid for 
all ages, one no longer has the possibility of discovering 
any regularity that remains unchanged in the flux of 
events. Then one can say no more than: If conditions 
remain unchanged for some time, they will remain un- 
changed. But whether or not they really remain un- 
changed can only be known afterward. 

The honest historicist would have to say: Nothing 
can be asserted about the future. Nobody can know 
how a definite policy will work in the future. All we 
believe to know is how similar policies worked in the 
past. Provided all relevant conditions remain un- 
changed, we may expect that the future effects will not 
widely differ from those of the past. But we do not 
know whether or not these relevant conditions will re- 

3. Mises, Human Action, p. 101. 

4. Ibid., pp. 117-18. See below, p. 309. 


main unchanged. Hence we cannot make any prognosti- 
cation about the — necessarily future — effects of any 
measure considered. We are dealing with the history of 
the past, not with the history of the future. 

A dogma supported by many historicists asserts that 
tendencies of social and economic evolution as mani- 
fested in the past, and especially in the recent past, will 
prevail in the future too. Study of the past, they con- 
clude, discloses therefore the shape of things to come. 

Leaving aside all the metaphysical ideas with which 
this trend-philosophy has been loaded, we have only to 
realize that trends can change, have changed in the 
past, and will change in the future too. 8 The historicist 
does not know when the next change will occur. What 
he can announce about trends refers only to the past, 
never to the future. 

Some of the German historicists liked to compare 
their periodization of economic history with the periodi- 
zation of the history of art. As the history of art deals 
with the succession of various styles of artistic activities, 
economic history deals with the succession of various 
styles of economic activities (Wirtschaftsstile) . This 
metaphor is neither better nor worse than other meta- 
phors. But what the historicists who resorted to it failed 
to say was that the historians of art talk only about the 
styles of the past and do not develop doctrines about 
the art styles of the future. However, the historicists are 
writing and lecturing about the economic conditions of 
the past only in order to derive from them conclusions 

5. Mises, Planning for Freedom (South Holland, 111., 1952), pp. 


about economic policies that necessarily are directed 
toward the economic conditions of the future. 

2. The Rejection of Economics 

As historicism sees it, the essential error of economics 
consists in its assumption that man is invariably egoistic 
and aims exclusively at material well-being. 

According to Gunnar Myrdal economics asserts that 
human actions are "solely motivated by economic in- 
terests" and considers as economic interests "the desire 
for higher incomes and lower prices and, in addition, 
perhaps stability of earnings and employment, reason- 
able time for leisure and an environment conducive to 
its satisfactory use, good working conditions, etc." This, 
he says, is an error. One does not completely account 
for human motivations by simply registering economic 
interests. What really determines human conduct is not 
interests alone but attitudes. "Attitude means the emo- 
tive disposition of an individual or a group to respond 
in certain ways to actual or potential situations." There 
are "fortunately many people whose attitudes are not 
identical with their interests." 1 

Now, the assertion that economics ever maintained 
that men are solely motivated by the striving after 
higher incomes and lower prices is false. Because of 
their failure to disentangle the apparent paradox of the 
use-value concept, the Classical economists and their 

1. Gunnar Myrdal, The Political Element in the Development of 
Economic Theory, trans, by P. Streeten (Cambridge, Harvard Uni- 
versity Press, 1954), pp. 199-200. 


epigones were prevented from providing a satisfactory 
interpretation of the conduct of the consumers. They 
virtually dealt only with the conduct of the business- 
men who serve the consumers and for whom the valua- 
tions of their customers are the ultimate standard. 
When they referred to the principle of buying on the 
cheapest market and selling on the dearest market, they 
were trying to interpret the actions of the businessman 
in his capacity as a purveyor of the buyers, not in his 
capacity as a consumer and spender of his own income. 
They did not enter into an an Jysis of the motives 
prompting the individual consumers to buy and to con- 
sume. So they did not investigate whether individuals 
try only to fill their bellies or whether they also spend 
for other purposes, e.g., to perform what they consider 
to be their ethical and religious duties. When they dis- 
tinguished between purely economic motives and other 
motives, the classical economists referred only to the 
acquisitive side of human behavior. They never thought 
of denying that men are also driven by other motives. 

The approach of Classical economics appears highly 
unsatisfactory from the point of view of modern subjec- 
tive economics. Modern economics rejects as entirely 
fallacious also the argument advanced for the epistemo- 
logical justification of the Classical methods by their 
last followers, especially John Stuart Mill. According to 
this lame apology, pure economics deals only with the 
"economic" aspect of the operations of mankind, only 
with the phenomena of the production of wealth "as far 
as those phenomena are not modified by the pursuit 
of any other object." But, says Mill, in order to deal ade- 


quately with reality "the didactic writer on the subject 
will naturally combine in his exposition, with the truth 
of pure science, as many of the practical modifications 
as will, in his estimation, be most conducive to the use- 
fulness of his work." 2 This certainly explodes Mr. Myr- 
dal's assertion, so far as Classical economics is con- 

Modern economics traces all human actions back to 
the value judgments of individuals. It never was so 
foolish, as Myrdal charges, as to believe that all that 
people are after is higher incomes and lower prices. 
Against this unjustified criticism which has been re- 
peated a hundred times, Bohm-Bawerk already in his 
first contribution to the theory of value, and then later 
again and again, explicitly emphasized that the term 
"well-being" (Wohlfahrtszwecke) as he uses it in the 
exposition of the theory of value does not refer only 
to concerns commonly called egoistic but comprehends 
everything that appears to an individual as desirable 
and worthy of being aimed at ( erstrebenswert ) . s 

In acting man prefers some things to other things, 
and chooses between various modes of conduct. The 
result of the mental process that makes a man prefer 
one thing to another thing is called a judgment of value. 
In speaking of value and valuations economics refers to 
such judgments of value, whatever their content may 

2. John Stuart Mill, Essays on Some Unsettled Questions of Politi- 
cal Economy (3d ed. London, 1877), pp. 140-1. 

3. Bohm-Bawerk, "Grundzuge der Theorie des wirtschaftlichen 
Guterwerts," Jahrbucher fiir Nationalokonomie und Statistik, N.F., 
13 (1886), 479, n. 1; Kapital und Kapitalzins (3d ed. Innsbruck, 
1909), 2, 316-17, n. 1. 


be. It is irrelevant for economics, up to now the best 
developed part of praxeology, whether an individual 
aims like a member of a labor union at higher wages or 
like a saint at the best performance of religious duties. 
The "institutional" fact that most people are eager to 
get more tangible good is a datum of economic history, 
not a theorem of economics. 

All brands of historicism — the German and the Brit- 
ish historical schools of the social sciences, American 
institutionalism, the adepts of Sismondi, Le Play, and 
Veblen, and many kindred "unorthodox" sects — em- 
phatically reject economics. But their writings are full 
of inferences drawn from general propositions about 
the effects of various modes of acting. It is, of course, 
impossible to deal with any "institutional" or historical 
problem without referring to such general propositions. 
Every historical report, no matter whether its theme is 
the conditions and events of a remote past or those of 
yesterday, is inevitably based on a definite kind of eco- 
nomic theory. The historicists do not eliminate eco- 
nomic reasoning from their treatises. While rejecting 
an economic doctrine they do not like, they resort in 
dealing with events to fallacious doctrines long since 
refuted by the economists. 

The theorems of economics, say the historicists, are 
void because they are the product of a priori reasoning. 
Only historical experience can lead to realistic econom- 
ics. They fail to see that historical experience is always 
the experience of complex phenomena, of the joint 
effects brought about by the operation of a multiplicity 
of elements. Such historical experience does not give 


the observer facts in the sense in which the natural sci- 
ences apply this term to the results obtained in labora- 
tory experiments. ( People who call their offices, studies, 
and libraries "laboratories" for research in economics, 
statistics, or the social sciences are hopelessly muddle- 
headed. ) Historical facts need to be interpreted on the 
ground of previously available theorems. They do not 
comment upon themselves. 

The antagonism between economics and historicism 
does not concern the historical facts. It concerns the 
interpretation of the facts. In investigating and narrat- 
ing facts a scholar may provide a valuable contribution 
to history, but he does not contribute to the increase 
and perfection of economic knowledge. 

Let us once more refer to the often repeated proposi- 
tion that what the economists call economic laws are 
merely principles governing conditions under capital- 
ism and of no avail for a differently organized society, 
especially not for the coming socialist management of 
affairs. As these critics see it, it is only the capitalists 
with their acquisitiveness who bother about costs and 
about profit. Once production for use has been substi- 
tuted for production for profit, the categories of cost 
and profit will become meaningless. The primary error 
of economics consists in considering these and other 
categories as eternal principles determining action un- 
der any kind of institutional conditions. 

However, cost is an element in any kind of human 
action, whatever the particular features of the individ- 
ual case may be. Cost is the value of those things the 
actor renounces in order to attain what he wants to 


attain; it is the value he attaches to the most urgently 
desired satisfaction among those satisfactions which he 
cannot have because he preferred another to it. It is 
the price paid for a thing. If a young man says: "This 
examination cost me a week end with friends in the 
country," he means: "If I had not chosen to prepare for 
my examination, I would have spent this week end with 
friends in the country." Things it costs no sacrifice to 
attain are not economic goods but free goods and as 
such no objects of any action. Economics does not deal 
with them. Man does not have to choose between them 
and other satisfactions. 

Profit is the difference between the higher value of 
the good obtained and the lower value of the good 
sacrificed for its obtainment. If the action, due to bun- 
gling, error, an unanticipated change in conditions, or 
to other circumstances, results in obtaining something 
to which the actor attaches a lower value than to the 
price paid, the action generates a loss. Since action 
invariably aims to substitute a state of affairs which the 
actor considers as more satisfactory for a state which he 
considers less satisfactory, action always aims at profit 
and never at loss. This is valid not only for the actions 
of individuals in a market economy but no less for the 
actions of the economic director of a socialist society. 

3. The Quest for Laws of Historical Change 

A widespread error confuses historicism and history. 
Yet the two have nothing in common. History is the 
presentation of the course of past events and conditions, 


a statement of facts and of their effects. Historicism is 
an epistemological doctrine. 

Some schools of historicism have declared that his- 
tory is the only way to deal with human action and 
have denied the adequacy, possibility, and meaning- 
fulness of a general theoretical science of human action. 
Other schools have condemned history as unscientific 
and, paradoxically enough, have developed a sympa- 
thetic attitude toward the negative part of the doctrines 
of the positivists, who asked for a new science which, 
modeled on the pattern of Newtonian physics, should 
derive from historical experience laws of historical ev- 
olution and of "dynamic" change. 

The natural sciences have developed, on the basis of 
Carnot's second law of thermodynamics, a doctrine 
about the course of the history of the universe. Free 
energy capable of work depends on thermodynamic in- 
stability. The process producing such energy is irrever- 
sible. Once all free energy produced by unstable systems 
is exhausted, life and civilization will cease. In the light 
of this cognition the universe as we know it appears as 
an evanescent episode in the flux of eternity. It moves 
toward its own extinction. 

But the law from which this inference is drawn, Car- 
not's second law, is in itself not a historical or dynamic 
law. Like all other laws of the natural sciences, it is de- 
rived from the observation of phenomena and verified 
by experiments. We call it a law because it describes a 
process that repeats itself whenever the conditions for 
its operation are present. The process is irreversible, 
and from this fact scientists infer that the conditions 


for its operation will no longer be given once all thermo- 
dynamic instability has disappeared. 

The notion of a law of historical change is self- 
contradictory. History is a sequence of phenomena that 
are characterized by their singularity. Those features 
which an event has in common with other events are 
not historical. What murder cases have in common re- 
fers to penal law, to psychology, to the technique of 
killing. As historical events the assassination of Julius 
Caesar and that of Henri IV of France are entirely dif- 
ferent. The importance of an event for the production 
of further events is what counts for history. This effect 
of an event is unique and unrepeatable. Seen from the 
point of view of American constitutional law, the presi- 
dential elections of 1860 and of 1956 belong to the same 
class. For history they are two distinct events in the 
flux of affairs. If a historian compares them, he does so 
in order to elucidate the differences between them, not 
in order to discover laws that govern any instance of an 
American presidential election. Sometimes people for- 
mulate certain rules of thumb concerning such elec- 
tions, as for instance: the party in power wins if business 
is booming. These rules are an attempt to understand 
the conduct of the voters. Nobody ascribes to them the 
necessity and apodictic validity which is the essential 
logical feature of a law of the natural sciences. Every- 
body is fully aware that the voters might proceed in a 
different way. 

Carnot's second law is not the result of a study of 
the history of the universe. It is a proposition about phe- 
nomena that are repeated daily and hourly in precisely 


the way the law describes. From this law science de- 
duces certain consequences concerning the future of the 
universe. This deduced knowledge is in itself not a law. 
It is the application of a law. It is a prognostication 
of future events made on the basis of a law that de- 
scribes what is believed to be an inexorable necessity 
in the sequence of repeatable and repeated events. 

Neither is Darwin's principle of natural selection a 
law of historical evolution. It tries to explain biological 
change as the outcome of the operation of a biological 
law. It interprets the past, it does not prognosticate 
things to come. Although the operation of the principle 
of natural selection may be considered as perennial, it is 
not permissible to infer that man must inevitably de- 
velop into a sort of superman. A line of evolutionary 
change may lead into a dead end beyond which there 
is no further change at all or a retrogression to previous 

As it is impossible to deduce any general laws from 
the observation of historical change, the program of 
"dynamic" historicism could only be realized by dis- 
covering that the operation of one or several praxeolog- 
ical laws must inevitably result in the emergence of 
definite conditions of the future. Praxeology and its 
until now best-developed branch, economics, never 
claimed to know anything about such matters. Histori- 
cism, on account of its rejection of praxeology, was 
from the outset prevented from embarking upon such a 

Everything that has been said about future historical 
events, inevitably bound to come, stems from prophe- 


cies elaborated by the metaphysical methods of the 
philosophy of history. By dint of intuition the author 
guesses the plans of the prime mover, and all uncer- 
tainty about the future disappears. The author of the 
Apocalypse, Hegel and, above all, Marx held them- 
selves to be perfectly familiar with the laws of historical 
evolution. But the source of their knowledge was not 
science; it was the revelation of an inner voice. 

4. Historicist Relativism 

The ideas of historicism can be understood only if 
one takes into account that they sought exclusively 
one end: to negate everything that rationalist social 
philosophy and economics had established. In this pur- 
suit many historicists did not shrink from any absurdity. 
Thus to the statement of the economists that there is 
an inevitable scarcity of nature-given factors upon which 
human well-being depends they opposed the fantastic 
assertion that there is abundance and plenty. What 
brings about poverty and want, they say, is the inade- 
quacy of social institutions. 

When the economists referred to progress, they looked 
upon conditions from the point of view of the ends 
sought by acting men. There was nothing metaphysical 
in their concept of progress. Most men want to live and 
to prolong their lives; they want to be healthy and to 
avoid sickness; they want to live comfortably and not to 
exist on the verge of starvation. In the eyes of acting 
men advance toward these goals means improvement, 
the reverse means impairment. This is the meaning of 


the terms "progress" and "retrogression" as applied by 
economists. In this sense they call a drop in infant mor- 
tality or success in fighting contagious diseases progress. 

The question is not whether such progress makes peo- 
ple happy. It makes them happier than they would 
otherwise have been. Most mothers feel happier if their 
children survive, and most people feel happier without 
tuberculosis than with it. Looking upon conditions from 
his personal point of view, Nietzsche expressed mis- 
givings about the "much too many." But the objects of 
his contempt thought differently. 

In dealing with the means to which men resorted in 
their actions history as well as economics distinguishes 
between means which were fit to attain the ends sought 
and those which were not. In this sense progress is the 
substitution of more suitable methods of action for less 
suitable. Historicism takes offense at this terminology. 
All things are relative and must be viewed from the 
point of view of their age. Yet no champion of histori- 
cism has the boldness to contend that exorcism ever 
was a suitable means to cure sick cows. But the histori- 
cists are less cautious in dealing with economics. For 
instance, they declare that what economics teaches 
about the effects of price control is inapplicable to the 
conditions of the Middle Ages. The historical works of 
authors imbued with the ideas of historicism are mud- 
dled precisely on account of their rejection of eco- 

While emphasizing that they do not want to judge 
the past by any preconceived standard, the historicists 
in fact try to justify the policies of the "good old days." 


Instead of approaching the theme of their studies with 
the best mental equipment available, they rely upon 
the fables of pseudo economics. They cling to the super- 
stition that decreeing and enforcing maximum prices 
below the height of the potential prices which the un- 
hampered market would fix is a suitable means to im- 
prove the conditions of the buyers. They omit to men- 
tion the documentary evidence of the failure of the just 
price policy and of its effects which, from the point of 
view of the rulers who resorted to it, were more un- 
desirable than the previous state of affairs which they 
were designed to alter. 

One of the vain reproaches heaped by historicists on 
the economists is their alleged lack of historical sense. 
Economists, they say, believe that it would have been 
possible to improve the material conditions of earlier 
ages if only people had been familiar with the theories 
of modern economics. Now, there can be no doubt that 
the conditions of the Roman Empire would have been 
considerably affected if the emperors had not resorted 
to currency debasement and had not adopted a policy 
of price ceilings. It is no less obvious that the mass 
penury in Asia was caused by the fact that the despotic 
governments nipped in the bud all endeavors to accum- 
ulate capital. The Asiatics, unlike the Western Euro- 
peans, did not develop a legal and constitutional system 
which would have provided the opportunity for large- 
scale capital accumulation. And the public, actuated by 
the old fallacy that a businessman's wealth is the cause 
of other people's poverty, applauded whenever rulers 
confiscated the holdings of successful merchants. 


The economists have always been aware that the ev- 
olution of ideas is a slow, time-consuming process. The 
history of knowledge is the account of a series of suc- 
cessive steps made by men each of whom adds some- 
thing to the thoughts of his predecessors. It is not sur- 
prising that Democritus of Abdera did not develop the 
quantum theory or that the geometry of Pythagoras and 
Euclid is different from that of Hilbert. Nobody ever 
thought that a contemporary of Pericles could have cre- 
ated the free-trade philosophy of Hume, Adam Smith, 
and Ricardo and converted Athens into an emporium of 

There is no need to analyze the opinion of many his- 
toricists that to the soul of some nations the practices 
of capitalism appear so repulsive that they will never 
adopt them. If there are such peoples, they will forever 
remain poor. There is but one road that leads toward 
prosperity and freedom. Can any historicist on the 
ground of historical experience contest this truth? 

No general rules about the effects of various modes 
of action and of definite social institutions can be de- 
rived from historical experience. In this sense the fa- 
mous dictum is true that the study of history can teach 
only one thing: viz., that nothing can be learned from 
history. We could therefore agree with the historicists 
in not paying much attention to the indisputable fact 
that no people ever raised itself to a somewhat satis- 
factory state of welfare and civilization without the in- 
stitution of private ownership of the means of produc- 
tion. It is not history but economics that clarifies our 
thoughts about the effects of property rights. But we 


must entirely reject the reasoning, very popular with 
many nineteenth-century writers, that the alleged fact 
that the institution of private property was unknown 
to peoples in primitive stages of civilization is a valid 
argument in favor of socialism. Having started as the 
harbingers of a future society which will wipe out all 
that is unsatisfactory and will transform the earth into 
a paradise, many socialists, for instance Engels, virtu- 
ally became advocates of a return to the supposedly 
blissful conditions of a fabulous golden age of the re- 
mote past. 

It never occurred to the historicists that man must 
pay a price for every achievement. People pay the price 
if they believe that the benefits derived from the thing 
to be acquired outweigh the disadvantages resulting 
from the sacrifice of something else. In dealing with 
this issue historicism adopts the illusions of romantic 
poetry. It sheds tears about the defacement of nature 
by civilization. How beautiful were the untouched vir- 
gin forests, the waterfalls, the solitary shores before the 
greed of acquisitive people spoiled their beauty! The 
romantic historicists pass over in silence the fact that 
the forests were cut down in order to win arable land 
and the falls were utilized to produce power and light. 
There is no doubt that Coney Island was more idyllic 
in the days of the Indians than it is today. But in its 
present state it gives millions of New Yorkers an oppor- 
tunity to refresh themselves which they cannot get else- 
where. Talk about the magnificence of untouched nature 
is idle if it does not take into account what man has got 
by "desecrating" nature. The earth's marvels were cer- 


tainly splendid when visitors seldom set foot upon them. 
Commercially organized tourist traffic made them ac- 
cessible to the many. The man who thinks "What a pity 
not to be alone on this peak! Intruders spoil my pleas- 
ure," fails to remember that he himself probably would 
not be on the spot if business had not provided all the 
facilities required. 

The technique of the historicists' indictment of cap- 
italism is simple indeed. They take all its achievements 
for granted, but blame it for the disappearance of some 
enjoyments that are incompatible with it and for some 
imperfections which still may disfigure its products. 
They forget that mankind has had to pay a price for its 
achievements — a price paid willingly because people 
believe that the gain derived, e.g., the prolongation of 
the average length of life, is more to be desired. 

5. Dissolving History 

History is a sequence of changes. Every historical sit- 
uation has its individuality, its own characteristics that 
distinguish it from any other situation. The stream of 
history never returns to a previously occupied point. 
History is not repetitious. 

Stating this fact is not to express any opinion about 
the biological and anthropological problem of whether 
mankind is descended from a common human ancestry. 
There is no need to raise the question here whether the 
transformation of subhuman primates into the species 
Homo sapiens occurred only once at a definite time and 
in a definite part of the earth's surface or came to pass 


several times and resulted in the emergence of various 
original races. Neither does the establishment of this 
fact mean that there is such a thing as unity of civiliza- 
tion. Even if we assume that all men are scions of a 
common human ancestry, there remains the fact that 
the scarcity of the means of sustenance brought about 
a dispersal of people over the globe. This dispersal re- 
sulted in the segregation of various groups. Each of 
these groups had to solve for itself man's specific prob- 
lem of life: how to pursue the conscious striving after 
improvement of conditions warranting survival. Thus 
various civilizations emerged. It will probably never be 
known to what extent definite civilizations were iso- 
lated and independent of one another. But it is certain 
that for thousands of years instances of such cultural 
isolation existed. It was only the explorations of Euro- 
pean navigators and travelers that finally put an end 
to it. 

Many civilizations came to an impasse. They either 
were destroyed by foreign conquerors or disintegrated 
from within. Next to the ruins of marvelous structures 
the progeny of their builders live in poverty and ig- 
norance. The cultural achievements of their forefathers, 
their philosophy, technology, and often even their lan- 
guage have fallen into oblivion, and the people have 
relapsed into barbarism. In some cases the literature of 
the extinct civilization has been preserved and, redis- 
covered by scholars, has influenced later generations 
and civilizations. 

Other civilizations developed to a certain point and 
then came to a standstill. They were arrested, as Bage- 


hot said. 1 The people tried to preserve the achievements 
of the past but they no longer planned to add anything 
new to them. 

A firm tenet of eighteenth-century social philosophy 
was meliorism. Once the superstitions, prejudices, and 
errors that caused the downfall of older civilizations 
have given way to the supremacy of reason, there will 
be a steady improvement of human conditions. The 
world will become better every day. Mankind will 
never return to the dark ages. Progress toward higher 
stages of well-being and knowledge is irresistible. All 
reactionary movements are doomed to failure. Present- 
day philosophy no longer indulges in such optimistic 
views. We realize that our civilization too is vulnerable. 
True, it is safe against external attacks on the part of 
foreign barbarians. But it could be destroyed from 
within by domestic barbarians. 

Civilization is the product of human effort, the 
achievement of men eager to fight the forces adverse to 
their well-being. This achievement is dependent on 
men's using suitable means. If the means chosen are not 
fit to produce the ends sought, disaster results. Bad pol- 
icies can disintegrate our civilization as they have de- 
stroyed many other civilizations. But neither reason 
nor experience warrants the assumption that we cannot 
avoid choosing bad policies and thereby wrecking our 

There are doctrines hypostatizing the notion of civ- 
ilization. In their view a civilization is a sort of living 
being. It comes into existence, thrives for some time, 

1. Walter Bagehot, Physics and Politics (London, 1872), p. 212. 


and finally dies. All civilizations, however different 
they may appear to the superficial observer, have the 
same structure. They must necessarily pass through the 
same sequence of successive stages. There is no history. 
What is mistakenly called history is in fact the repe- 
tition of events belonging to the same class; is, as 
Nietzsche put it, eternal recurrence. 

The idea is very old and can be traced back to an- 
cient philosophy. It was adumbrated by Giovanni Bat- 
tista Vico. It played some role in the attempts of several 
economists to develop schemes of parallelisms of the 
economic history of various nations. It owes its present 
popularity to Oswald Spengler's Decline of the West. 
Softened to some extent and thereby rendered incon- 
sistent, it is the main idea of the voluminous Study of 
History on which Arnold J. Toynbee is still working. 
There is no doubt that both Spengler and Toynbee were 
prompted by the widespread disparagement of capital- 
ism. Spengler's motive clearly was to prognosticate the 
inevitable breakdown of our civilization. Although un- 
affected by the chiliastic prophecies of the Marxians, he 
was himself a socialist and entirely under the sway of 
the socialists' vilification of the market economy. He 
was judicious enough to see the disastrous implications 
of the policies of the German Marxians. But, lacking 
any economic knowledge and even full of contempt for 
economics, he came to the conclusion that our civiliza- 
tion has to choose between two evils each of which is 
bound to destroy it. The doctrines of both Spengler and 
Toynbee show clearly the poor results engendered by 
neglect of economics in any treatment of human con- 


cems. True, Western civilization is decadent. But its de- 
cadence consists precisely in the endorsement of the 
anticapitalistic creed. 

What we may call the Spengler doctrine dissolves 
history into the record of the life span of individual 
entities, the various civilizations. We are not told in 
precise terms what marks characterize an individual 
civilization as such and distinguish it from another civ- 
ilization. All that we learn about this essential matter 
is metaphorical. A civilization is like a biological being; 
it is born, grows, matures, decays, and dies. Such anal- 
ogies are no substitute for unambiguous clarification 
and definition. 

Historical research cannot deal with all things to- 
gether; it must divide and subdivide the totality of 
events. Out of the whole body of history it carves sep- 
arate chapters. The principles applied in so doing are 
determined by the way the historian understands things 
and events, value judgments and the actions prompted 
by them and the relation of actions to the further course 
of affairs. Almost all historians agree in dealing sepa- 
rately with the history of various more or less isolated 
peoples and civilizations. Differences of opinion about 
the application of this procedure to definite problems 
must be decided by careful examination of each indi- 
vidual case. No epistemological objection can be raised 
to the idea of distinguishing various civilizations within 
the totality of history. 

But what the Spengler doctrine means is something 
entirely different. In its context a civilization is a Gestalt, 
a whole, an individuality of a distinct nature. What de- 


termines its origin, changes, and extinction stems from 
its own nature. It is not the ideas and actions of the 
individuals that constitute the historical process. There 
is in fact no historical process. On the earth civilizations 
come into being, live for some time, and then die just 
as various specimens of every plant species are born, 
live, and wither away. Whatever men may do is irrele- 
vant to the final outcome. Every civilization must decay 
and die. 

There is no harm in comparing different historical 
events and different events that occurred in the history 
of various civilizations. But there is no justification 
whatever for the assertion that every civilization must 
pass through a sequence of inevitable stages. 

Mr. Toynbee is inconsistent enough not to deprive us 
entirely of any hope for the survival of our civilization. 
While the whole and only content of his study is to 
point out that the process of civilization consists of pe- 
riodic repetitive movements, he adds that this "does not 
imply that the process itself is of the same cyclical order 
as they are." Having taken pains to show that sixteen 
civilizations have perished already and nine others are 
at the point of death, he expresses a vague optimism 
concerning the future of the twenty-sixth civilization. 2 

History is the record of human action. Human action 
is the conscious effort of man to substitute more satis- 
factory conditions for less satisfactory ones. Ideas de- 
determine what are to be considered more and less 
satisfactory conditions and what means are to be re- 

2. A. J. Toynbee, A Study of History, Abridgment of Volumes 
I-VI by D. C. Somervell (Oxford University Press, 1947), p. 254. 


sorted to to alter them. Thus ideas are the main theme of 
the study of history. Ideas are not an invariable stock 
that existed from the very beginning of things and that 
does not change. Every idea originated at a definite 
point of time and space in the head of an individual. 
(Of course, it has happened again and again that the 
same idea originated independently in the heads of var- 
ious individuals at various points of time and space.) 
The genesis of every new idea is an innovation; it adds 
something new and unheard of before to the course of 
world affairs. The reason history does not repeat itself 
is that every historical state is the consummation of the 
operation of ideas different from those that operated in 
other historical states. 

Civilization differs from the mere biological and phys- 
iological aspects of life in being an offshoot of ideas. 
The essence of civilization is ideas. If we try to distin- 
guish different civilizations, the differentia specified can 
be found only in the different meanings of the ideas 
that determined them. Civilizations differ from one an- 
other precisely in the quality of the substance that char- 
acterizes them as civilizations. In their essential struc- 
ture they are unique individuals, not members of a class. 
This forbids us to compare their vicissitudes with the 
physiological process going on in an individual man's or 
animal's life. In every animal body the same physiolog- 
ical changes come to pass. A child ripens in the mother's 
womb, it is delivered, grows, matures, decays, and dies 
in the consummation of the same cycle of life. It is 
quite another thing with civilizations. In being civiliza- 
tions they are disparate and incommensurable because 


they are actuated by different ideas and therefore de- 
velop in different ways. 

Ideas must not be classified without regard to the 
soundness of their content. Men have had different 
ideas concerning the cure of cancer. Up to now none 
of these ideas has produced fully satisfactory results. 
But this would not justify the inference that therefore 
future attempts to cure cancer will also be futile. The 
historian of past civilizations may declare: There was 
something wrong with the ideas upon which those civ- 
ilizations that decayed from within were built. But he 
must not derive from this fact the conclusion that other 
civilizations, built on different ideas, are also doomed. 
Within the body of animals and plants forces are op- 
erating that are bound to disintegrate it eventually. No 
such forces could be discovered in the "body" of a civ- 
ilization which would not be the outcome of its partic- 
ular ideologies. 

No less vain are efforts to search in the history of 
various civilizations for parallelisms or identical stages 
in their life span. We may compare the history of vari- 
ous peoples and civilizations. But such comparisons 
must deal not only with similarities but also with differ- 
ences. The eagerness to discover similarities induces 
authors to neglect or even to conjure away discrepan- 
cies. The first task of the historian is to deal with his- 
torical events. Comparisons made afterward on the 
basis of a knowledge of events as perfect as possible 
may be harmless or sometimes even instructive. Com- 
parisons that accompany or even precede study of the 
sources create confusion if not outright fables. 


6. Undoing History 

There have always been people who exalted the good 
old days and advocated a return to the happy past. The 
resistance offered to legal and constitutional innova- 
tions by those whom they hurt has frequently crystal- 
lized in programs that requested a reconstruction of 
old institutions or presumably old institutions. In some 
cases reforms that aimed at something essentially new 
have been recommended as a restoration of ancient law. 
An eminent example was provided by the role Magna 
Charta played in the ideologies of England's seven- 
teenth-century anti-Stuart parties. 

But it was historicism which for the first time frankly 
suggested unmaking historical changes and returning to 
extinct conditions of a remote past. We need not deal 
with the lunatic fringe of this movement, such as Ger- 
man attempts to revive the cult of Wodan. Neither do 
the sartorial aspects of these tendencies deserve more 
than ironical comments. (A magazine picture showing 
members of the Hanover-Coburg family parading in 
the garb of the Scottish clansmen who fought at Cullo- 
den would have startled the "Butcher" Cumberland.) 
Only the linguistic and economic issues involved re- 
quire attention. 

In the course of history many languages have been 
submerged. Some disappeared completely without leav- 
ing any trace. Others are preserved in old documents, 
books, and inscriptions and can be studied by scholars. 
Several of these "dead" languages — Sanskrit, Hebrew, 


Greek, and Latin — influence contemporary thought 
through the philosophical and poetical value of the 
ideas expressed in their literature. Others are merely 
objects of philological research. 

The process that resulted in the extinction of a lan- 
guage was in many cases merely linguistic growth and 
transformation of the spoken word. A long succession 
of slight changes altered the phonetic forms, the vocab- 
ulary, and the syntax so thoroughly that later genera- 
tions could no longer read the documents bequeathed 
by their ancestors. The vernacular developed into a new 
distinct language. The old tongue could only be under- 
stood by those with special training. The death of the 
old language and the birth of the new one were the 
outcome of a slow, peaceful evolution. 

But in many cases linguistic change was the outcome 
of political and military events. People speaking a for- 
eign language acquired political and economic hegem- 
ony either by military conquest or by the superiority 
of their civilization. Those speaking the native tongue 
were relegated to a subordinate position. On account 
of their social and political disabilities it did not matter 
very much what they had to say and how they said it. 
Important business was transacted exclusively in the 
language of their masters. Rulers, courts, church, and 
schools employed only this language; it was the lan- 
guage of the laws and the literature. The old native 
tongue was used only by the uneducated populace. 
Whenever one of these underlings wanted to rise to a 
better position, he had first to leam the language of 


the masters. The vernacular was reserved to the dullest 
and the least ambitious; it fell into contempt and finally 
into oblivion. A foreign language superseded the native 

The political and military events that actuated this 
linguistic process were in many cases characterized by 
tyrannical cruelty and pitiless persecution of all oppo- 
nents. Such methods met with the approval of some 
philosophers and moralists of precapitalistic ages, as 
they have sometimes won the praise of contemporary 
"idealists" when the socialists resort to them. But to the 
"spurious rationalistic dogmatism of the orthodox lib- 
eral doctrinaires" they appear shocking. The historical 
writings of the latter lacked that lofty relativism which 
induced self-styled "realistic" historians to explain and 
to justify all that had happened in the past and to vin- 
dicate surviving oppressive institutions. (As one critic 
reproachfully observed, in the utilitarians "old institu- 
tions awake no thrill; they are simply embodiments of 
prejudice.") * It does not need any further explanation 
why the descendants of the victims of those persecu- 
tions and oppressions judged in a different way the ex- 
perience of their ancestors, still less why they were in- 
tent upon abolishing those effects of past despotism 
which still hurt them. In some cases, not content with 
eliminating still existing oppression, they planned to 
undo also such changes as did not harm them any 
longer, however detrimental and malignant the proc- 

1. Leslie Stephens, The English Utilitarians (London, 1900), 3, 
70 (on J. Stuart Mill). 


ess that had brought them about had been in a distant 
past. It is precisely this that the attempts to undo lin- 
guistic changes aim at. 

The best example is provided by Ireland. Aliens had 
invaded and conquered the country, expropriated the 
landowners, destroyed its civilization, organized a des- 
potic regime, and tried to convert the people by force 
of arms to a religious creed which they despised. The 
establishment of an alien church did not succeed in 
making the Irish abandon Roman Catholicism. But the 
English language superseded the native Gaelic idiom. 
When later the Irish succeeded step by step in curbing 
their foreign oppressors and finally acquiring political 
independence, most of them were no longer linguis- 
tically different from the English. They spoke English 
and their eminent writers wrote English books some of 
which are among the outstanding works of modern 
world literature. 

This state of affairs hurts the feelings of many Irish. 
They want to induce their fellow citizens to return to 
the idiom their ancestors spoke in ages gone by. There 
is little open opposition to these pursuits. Few people 
have the courage to fight a popular movement openly, 
and radical nationalism is today, next to socialism, the 
most popular ideology. Nobody wants to risk being 
branded an enemy of his nation. But powerful forces 
are silently resisting the linguistic reform. People cling 
to the tongue they speak no matter whether those who 
want to suppress it are foreign despots or domestic 
zealots. The modern Irish are fully aware of the ad- 
vantages they derive from the fact that English is the 


foremost language of contemporary civilization, which 
everyone has to learn in order to read many important 
books or to play a role in international trade, in world 
affairs, and in great ideological movements. Precisely 
because the Irish are a civilized nation whose authors 
write not for a limited audience but for all educated 
people, the chances of a substitution of Gaelic for Eng- 
lish are slim. No nostalgic sentimentality can alter these 

It must be mentioned that the linguistic pursuits of 
Irish nationalism were prompted by one of the most 
widely adopted political doctrines of the nineteenth 
century. The principle of nationality as accepted by all 
the peoples of Europe postulates that every linguistic 
group must form an independent state and that this 
state must embrace all people speaking the same lan- 
guage. 2 From the point of view of this principle an 
English-speaking Ireland should belong to the United 
Kingdom of Great Britain and Ireland, and the mere 
existence of an independent Irish Free State appears 
irregular. The prestige which the principle of national- 
ity enjoyed in Europe was so enormous that various 
peoples who desired to form a state of their own the in- 
dependence of which was at variance with it tried to 
change their language in order to justify their aspira- 
tions in its light. This explains the attitude of the Irish 
nationalists, but it does not affect what has been said 
about the implications of their linguistic plans. 

A language is not simply a collection of phonetic 

2. Mises, Omnipotent Government (New Haven, Yale University 
Press, 1944), pp. 84-9. 


signs. It is an instrument of thinking and acting. Its vo- 
cabulary and grammar are adjusted to the mentality of 
the individuals whom it serves. A living language — 
spoken, written, and read by living men — changes con- 
tinually in conformity with changes occurring in the 
minds of those who use it. A language fallen into desue- 
tude is dead because it no longer changes. It mirrors 
the mentality of people long since passed away. It is 
useless to the people of another age no matter whether 
these people are biologically the scions of those who 
once used it or merely believe themselves to be their 
descendants. The trouble is not with the terms signify- 
ing tangible things. Such terms could be supplemented 
by neologisms. It is the abstract terms that provide in- 
soluble problems. The precipitate of a people's ideolog- 
ical controversies, of their ideas concerning issues of 
pure knowledge and religion, legal institutions, political 
organization, and economic activities, these terms re- 
flect all the vicissitudes of their history. In learning their 
meaning the rising generation are initiated into the 
mental environment in which they have to live and to 
work. This meaning of the various words is in continual 
flux in response to changes in ideas and conditions. 

Those who want to revive a dead language must in 
fact create out of its phonetic elements a new language 
whose vocabulary and syntax are adjusted to the con- 
ditions of the present age, entirely different from those 
of the old age. The tongue of their ancestors is of no 
use to the modern Irish. The laws of present-day Ire- 
land could not be written in the old vocabulary; Shaw, 
Joyce, and Yeats could not have employed it in their 


plays, novels, and poems. One cannot wipe out history 
and return to the past. 

Different from the attempts to revive dead idioms 
are the plans to elevate local dialects to the position 
of a language of literature and other manifestations of 
thinking and acting. When communication between the 
various parts of a nation's territory was infrequent on 
account of the paucity of the interlocal division of labor 
and the primitiveness of transportation facilities, there 
was a tendency toward a disintegration of linguistic 
unity. Different dialects developed out of the tongue 
spoken by the people who had settled in an area. Some- 
times these dialects evolved into a distinct literary lan- 
guage, as was the case with the Dutch language. In 
other cases only one of the dialects became a literary 
language, while the others remained idioms employed 
in daily life but not used in the schools, the courts, in 
books, and in the conversation of educated people. Such 
was the outcome in Germany, for instance, where the 
writings of Luther and the Protestant theologians gave 
the idiom of the "Saxon Chancellery" a preponderant 
position and reduced all other dialects to subordinate 

Under the impact of historicism movements sprang 
up which aim at undoing this process by elevating dia- 
lects into literary languages. The most remarkable of 
these tendencies is Felibrige, the design to restore to 
the Provencal tongue the eminence it once enjoyed as 
Langue d'Oc. The F^librists, led by the distinguished 
poet Mistral, were judicious enough not to plan a com- 
plete substitution of their idiom for French. But even 


the prospects of their more moderate ambition, to cre- 
ate a new Provencal poesy, seem to be inauspicious. 
One cannot imagine any of the modern French master- 
pieces composed in Provencal. 

Local dialects of various languages have been em- 
ployed in novels and plays depicting the life of the un- 
educated. There is often an inherent insincerity in such 
writings. The author condescendingly puts himself on 
a level with people whose mentality he never shared 
or has since outgrown. He behaves like an adult who 
condescends to write books for children. No present- 
day work of literature can withdraw itself from the im- 
pact of the ideologies of our age. Once having gone 
through the schools of these ideologies, an author can- 
not successfully masquerade as a simple common man 
and adopt his speech and his world view. 

History is an irreversible process. 

7. Undoing Economic History 

The history of mankind is the record of a progressive 
intensification of the division of labor. Animals live in 
perfect autarky of each individual or of each quasi 
family. What made cooperation between men possible 
is the fact that work performed under the division of 
tasks is more productive than the isolated efforts of au- 
tarkic individuals and that man's reason is capable of 
conceiving this truth. But for these two facts men would 
have remained forever solitary food-seekers, forced by 
an inevitable law of nature to fight one another without 
pity and pardon. No social bonds, no feelings of sym- 


pathy, benevolence, and friendship, no civilization 
would have developed in a world in which everybody 
had to see in all other men rivals in the biological com- 
petition for a strictly limited supply of food. 

One of the greatest achievements of eighteenth-cen- 
tury social philosophy is the disclosure of the role 
which the principle of higher productivity resulting 
from division of labor has played in history. It was 
against these teachings of Smith and Ricardo that the 
most passionate attacks of historicism were directed. 

The operation of the principle of division of labor 
and its corollary, cooperation, tends ultimately toward 
a world-embracing system of production. Insofar as the 
geographical distribution of natural resources does not 
limit the tendencies toward specialization and integra- 
tion in the processing trades, the unhampered market 
aims at the evolution of plants operating in a compara- 
tively narrow field of specialized production but serv- 
ing the whole population of the earth. From the point 
of view of people who prefer more and better merchan- 
dise to a smaller and poorer supply the ideal system 
would consist in the highest possible concentration of 
the production of each speciality. The same principle 
that brought about the emergence of such specialists as 
blacksmiths, carpenters, tailors, bakers and also physi- 
cians, teachers, artists and writers would finally result 
in the emergence of one factory supplying the whole 
oecumene with some particular article. Although the 
geographical factor mentioned above counteracts the 
full operation of this tendency, international division of 
labor came into existence and will move forward until 


it reaches the limits drawn by geography, geology, and 

Every step on the road toward intensification of the 
division of labor hurts in the short run the personal in- 
terests of some people. The expansion of the more effi- 
cient plant hurts the interests of less efficient competitors 
whom it forces to go out of business. Technological in- 
novation hurts the interests of workers who can no 
longer make a living by clinging to the discarded in- 
ferior methods. The vested short-run interests of small 
business and of inefficient workers are adversely affected 
by any improvement. This is not a new phenomenon. 
Neither is it a new phenomenon that those prejudiced 
by economic improvement ask for privileges that will 
protect them against the competition of the more effi- 
cient. The history of mankind is a long record of obsta- 
cles placed in the way of the more efficient for the ben- 
efit of the less efficient. 

It is customary to explain the obstinate efforts to stop 
economic improvement by referring to the "interests." 
The explanation is very unsatisfactory. Leaving aside 
the fact that an innovation hurts merely the short-run 
interests of some people, we must emphasize that it 
hurts only the interests of a small minority while favor- 
ing those of the immense majority. The bread factory 
certainly hurts the small bakers. But it hurts them solely 
because it improves the conditions of all people con- 
suming bread. The importation of foreign sugar and 
watches hurts the interests of a small minority of Amer- 
icans. But it is a boon for all those who want to eat 
sugar and to buy watches. The problem is precisely 


this: Why is an innovation unpopular although it favors 
the interests of the great majority of the people? 

A privilege accorded to a special branch of business 
is in the short run advantageous to those who at the 
instant happen to be in this branch. But it hurts all 
other people to the same extent. If everybody is priv- 
ileged to the same degree, he loses as much in his ca- 
pacity as a consumer as he wins in his capacity as a 
producer. Moreover, everybody is hurt by the fact that 
productivity in all branches of domestic production 
drops on account of these privileges. 1 To the extent that 
American legislation is successful in its endeavors to 
curb big business, all are hurt because the products are 
produced at higher costs in plants which would have 
been wiped out in the absence of this policy. If the 
United States had gone as far as Austria did in its fight 
against big business, the average American would not 
be much better off than the average Austrian. 

It is not the interests that motivate the struggle 
against the further intensification of the division of la- 
bor, but spurious ideas about alleged interests. As in 
any other regard, historicism in dealing with these prob- 
lems too sees only the short-run disadvantages that re- 
sult for some people and ignores the long-run advan- 
tages for all of the people. It recommends measures 
without mentioning the price that must be paid for 
them. What fun shoemaking was in the days of Hans 
Sachs and the Meistersinger! No need to analyze criti- 
cally such romantic dreams. But how many people went 
barefoot in those days? What a disgrace the big chemi- 

1. See above, pp. 32 f. 


cal concerns are! But would it have been possible for 
pharmacists in their primitive laboratories to turn out 
the drugs that kill the bacilli? 

Those who want to set the clock of history back 
ought to tell people what their policy would cost. Split- 
ting up big business is all right if you are prepared to 
put up with the consequences. If the present American 
methods of taxing incomes and estates had been adopted 
fifty years ago, most of those new things which no 
American would like to do without today would not 
have been developed at all or, if they had, would have 
been inaccessible to the greater part of the nation. What 
such authors as Professors Sombart and Tawney say 
about the blissful conditions of the Middle Ages is mere 
fantasy. The effort "to achieve a continuous and unlim- 
ited increase in material wealth," says Professor Taw- 
ney, brings "ruin to the soul and confusion to society." 2 
No need to stress the fact that some people may feel 
that a soul so sensitive it is ruined by the awareness 
that more infants survive the first year of their lives and 
fewer people die from starvation today than in the 
Middle Ages is worth being ruined. What brings con- 
fusion to society is not wealth but the efforts of histori- 
cists such as Professor Tawney to discredit "economic 
appetites." After all it was nature, not the capitalists, 
that implanted appetites in man and impels him to sat- 
isfy them. In the collectivist institutions of the Middle 
Ages, such as church, township, village community, clan, 
family, and guild, says Sombart, the individual "was kept 

2. R. H. Tawney, Religion and the Rise of Capitalism (New York, 
Penguin Books, n.d.), pp. 38 and 234. 


warm and sheltered like the fruit in its rind." s Is this 
a faithful description of a time when the population 
was harassed again and again by famines, plagues, wars, 
the persecution of heretics, and other disasters? 

It is certainly possible to stop the further progress of 
capitalism or even to return to conditions in which small 
business and more primitive methods of production pre- 
vail. A police apparatus organized after the pattern of 
the Soviet constabulary can achieve many things. The 
question is only whether the nations that have built 
modern civilization will be ready to pay the price. 

3. W. Sombart, Der proletarische Sozialismus ( 10th ed. Jena, 
1924), 1, 31. 

Chapter 11. The Challenge of Scientism 

1. Positivism and Behaviorism 

What differentiates the realm of the natural sciences 
from that of the sciences of human action is the cate- 
gorial system resorted to in each in interpreting phe- 
nomena and constructing theories. The natural sciences 
do not know anything about final causes; inquiry and 
theorizing are entirely guided by the category of 
causality. The field of the sciences of human action is 
the orbit of purpose and of conscious aiming at ends; 
it is teleological. 

Both categories were resorted to by primitive man 
and are resorted to today by everybody in daily think- 
ing and acting. The most simple skills and techniques 
imply knowledge gathered by rudimentary research 
into causality. Where people did not know how to seek 
the relation of cause and effect, they looked for a tele- 
ological interpretation. They invented deities and devils 
to whose purposeful action certain phenomena were 
ascribed. A god emitted lightning and thunder. An- 
other god, angry about some acts of men, killed the 
offenders by shooting arrows. A witch's evil eye made 
women barren and cows dry. Such beliefs generated 
definite methods of action. Conduct pleasing to the 
deity, offering of sacrifices and prayer were considered 
suitable means to appease the deity's anger and to 



avert its revenge; magic rites were employed to neu- 
tralize witchcraft. Slowly people came to learn that 
meteorological events, disease, and the spread of 
plagues are natural phenomena and that lightning rods 
and antiseptic agents provide effective protection while 
magic rites are useless. It was only in the modern era 
that the natural sciences in all their fields substituted 
causal research for finalism. 

The marvelous achievements of the experimental nat- 
ural sciences prompted the emergence of a materialistic 
metaphysical doctrine, positivism. Positivism flatly de- 
nies that any field of inquiry is open for teleological 
research. The experimental methods of the natural sci- 
ences are the only appropriate methods for any kind of 
investigation. They alone are scientific, while the tra- 
ditional methods of the sciences of human action are 
metaphysical, that is, in the terminology of positivism, 
superstitious and spurious. Positivism teaches that the 
task of science is exclusively the description and in- 
terpretation of sensory experience. It rejects the intro- 
spection of psychology as well as all historical disci- 
plines. It is especially fanatical in its condemnation of 
economics. Auguste Comte, by no means the founder 
of positivism but merely the inventor of its name, sug- 
gested as a substitute for the traditional methods of 
dealing with human action a new branch of science, 
sociology. Sociology should be social physics, shaped 
according to the epistemological pattern of Newtonian 
mechanics. The plan was so shallow and impractical 
that no serious attempt was ever made to realize it. The 
first generation of Comte's followers turned instead 


toward what they believed to be biological and organic 
interpretation of social phenomena. They indulged 
freely in metaphorical language and quite seriously 
discussed such problems as what in the social "body" 
should be classed as "intercellular substance." When the 
absurdity of this biologism and organicism became ob- 
vious, the sociologists completely abandoned the am- 
bitious pretensions of Comte. There was no longer any 
question of discovering a posteriori laws of social 
change. Various historical, ethnographical, and psycho- 
logical studies were put out under the label sociology. 
Many of these publications were dilettantish and con- 
fused; some are acceptable contributions to various 
fields of historical research. Without any value, on the 
other hand, were the writings of those who termed 
sociology their arbitrary metaphysical effusions about 
the recondite meaning and end of the historical process 
which had been previously styled philosophy of his- 
tory. Thus, fimile Durkheim and his school revived 
under the appellation group mind the old specter of 
romanticism and the German school of historical juris- 
prudence, the Volksgeist. 

In spite of this manifest failure of the positivist pro- 
gram, a neopositivist movement has arisen. It stub- 
bornly repeats all the fallacies of Comte. The same 
motive inspires these writers that inspired Comte. They 
are driven by an idiosyncratic abhorrence of the market 
economy and its political coroDary: representative gov- 
ernment, freedom of thought, speech, and the press. 
They long for totalitarianism, dictatorship, and the 
ruthless oppression of all dissenters, taking, of course, 


for granted that they themselves or their intimate 
friends will be vested with the supreme office and the 
power to silence all opponents. Comte without shame 
advocated suppression of all doctrines he disliked. The 
most obtrusive champion of the neopositivist program 
concerning the sciences of human action was Otto Neu- 
rath who, in 1919, was one of the outstanding leaders of 
the short-lived Soviet regime of Munich and later co- 
operated briefly in Moscow with the bureaucracy of 
the Bolsheviks. 1 Knowing they cannot advance any 
tenable argument against the economists' critique of 
their plans, these passionate communists try to discredit 
economics wholesale on epistemological grounds. 

The two main varieties of the neopositivistic assault 
on economics are panphysicalism and behaviorism. 
Both claim to substitute a purely causal treatment of 
human action for the — as they declare unscientific — 
teleological treatment. 

Panphysicalism teaches that the procedures of phys- 
ics are the only scientific method of all branches of 
science. It denies that any essential differences exist 
between the natural sciences and the sciences of human 
action. This denial lies behind the panphysicalists' slo- 
gan "unified science." Sense experience, which conveys 
to man his information about physical events, provides 
him also with all information about the behavior of his 
fellow men. Study of the way his fellows react to var- 
ious stimuli does not differ essentially from study of the 
way other objects react. The language of physics is the 

1. Otto Neurath, "Foundations of the Social Sciences," Interna- 
tional Encyclopedia of Unified Science, Vol. 2, No. 1. 


universal language of all branches of knowledge, with- 
out exception. What cannot be rendered in the lan- 
guage of physics is metaphysical nonsense. It is arro- 
gant pretension in man to believe that his role in the 
universe is different from that of other objects. In the 
eyes of the scientist all things are equal. All talk about 
consciousness, volition, and aiming at ends is empty. 
Man is just one of the elements in the universe. The 
applied science of social physics, social engineering, 
can deal with man in the same way technology deals 
with copper and hydrogen. 

The panphysicalist might admit at least one essential 
difference between man and the objects of physics. The 
stones and the atoms reflect neither upon their own 
nature, properties, and behavior nor upon those of man. 
They do not engineer either themselves or man. Man is 
at least different from them insofar as he is a physicist 
and an engineer. It is difficult to conceive how one 
could deal with the activities of an engineer without 
realizing that he chooses between various possible lines 
of conduct and is intent upon attaining definite ends. 
Why does he build a bridge rather than a ferry? Why 
does he build one bridge with a capacity of ten tons 
and another with a capacity of twenty tons? Why is he 
intent upon constructing bridges that do not collapse? 
Or is it only an accident that most bridges do not col- 
lapse? If one eliminates from the treatment of human 
action the notion of conscious aiming at definite ends, 
one must replace it by the — really metaphysical — idea 
that some superhuman agency leads men, independ- 
ently of their will, toward a predestined goal: that what 


put the bridge-builder into motion was the preordained 
plan of Geist or the material productive forces which 
mortal men are forced to execute. 

To say that man reacts to stimuli and adjusts himself 
to the conditions of his environment does not provide 
a satisfactoiy answer. To the stimulus offered by the 
English Channel some people have reacted by staying 
at home; others have crossed it in rowboats, sailing 
ships, steamers, or, in modern times simply by swim- 
ming. Some fly over it in planes; others design schemes 
for tunneling under it. It is vain to ascribe the differ- 
ences in reaction to differences in attendant circum- 
stances such as the state of technological knowledge 
and the supply of labor and capital goods. These other 
conditions too are of human origin and can only be 
explained by resorting to teleological methods. 

The approach of behaviorism is in some respects dif- 
ferent from that of panphysicalism, but it resembles the 
latter in its hopeless attempt to deal with human action 
without reference to consciousness and aiming at ends. 
It bases its reasoning on the slogan "adjustment." Like 
any other being, man adjusts himself to the conditions 
of his environment. But behaviorism fails to explain 
why different people adjust themselves to the same 
conditions in different ways. Why do some people flee 
violent aggression while others resist it? Why did the 
peoples of Western Europe adjust themselves to the 
scarcity of all things on which human well-being de- 
pends in a way entirely different from that of the 

Behaviorism proposes to study human behavior ac- 


cording to the methods developed by animal and infant 
psychology. It seeks to investigate reflexes and instincts, 
automatisms and unconscious reactions. But it has told 
us nothing about the reflexes that have built cathedrals, 
railroads, and fortresses, the instincts that have pro- 
duced philosophies, poems, and legal systems, the au- 
tomatisms that have resulted in the growth and decline 
of empires, the unconscious reactions that are splitting 
atoms. Behaviorism wants to observe human behavior 
from without and to deal with it merely as reaction to 
a definite situation. It punctiliously avoids any refer- 
ence to meaning and purpose. However, a situation can- 
not be described without analyzing the meaning which 
the man concerned finds in it. If one avoids dealing 
with this meaning, one neglects the essential factor that 
decisively determines the mode of reaction. This re- 
action is not automatic but depends entirely upon the 
interpretation and value judgments of the individual, 
who aims to bring about, if feasible, a situation which 
he prefers to the state of affairs that would prevail if he 
were not to interfere. Consider a behaviorist describing 
the situation which an offer to sell brings about without 
reference to the meaning each party attaches to it! 

In fact, behaviorism would outlaw the study of hu- 
man action and substitute physiology for it. The be- 
haviorists never succeeded in making clear the differ- 
ence between physiology and behaviorism. Watson 
declared that physiology is "particularly interested in 
the functioning of parts of the animal . . . , behavior- 
ism, on the other hand, while it is intensely interested 
in all of the functioning of these parts, is intrinsically 


interested in what the whole animal will do." 2 How- 
ever, such physiological phenomena as the resistance 
of the body to infection or the growth and aging of an 
individual can certainly not be called behavior of parts. 
On the other hand, if one wants to call such a gesture 
as the movement of an arm (either to strike or to ca- 
ress ) behavior of the whole human animal, the idea can 
only be that such a gesture cannot be imputed to any 
separate part of the being. But what else can this some- 
thing to which it must be imputed be if not the meaning 
and the intention of the actor or that unnamed thing 
from which meaning and intention originate? Behavior- 
ism asserts that it wants to predict human behavior. 
But it is impossible to predict the reaction of a man ac- 
costed by another with the words "you rat" without 
referring to the meaning that the man spoken to at- 
taches to the epithet. 

Both varieties of positivism decline to recognize the 
fact that men aim purposefully at definite ends. As they 
see it, all events must be interpreted in the relationship 
of stimulus and response, and there is no room left for 
a search for final causes. Against this rigid dogmatism 
it is necessary to stress the point that the rejection of 
finalism in dealing with events outside the sphere of 
human action is enjoined upon science only by the in- 
sufficiency of human reason. The natural sciences must 
refrain from dealing with final causes because they are 
unable to discover any final causes, not because they 
can prove that no final causes are operative. The cogni- 

2. John B. Watson, Behaviorism (New York, W. W. Norton, 1930), 
p. 11. 


zance of the interconnectedness of all phenomena and 
of the regularity in their concatenation and sequence, 
and the fact that causality research works and has en- 
larged human knowledge, do not peremptorily preclude 
the assumption that final causes are operative in the 
universe. The reason for the natural sciences' neglect 
of final causes and their exclusive preoccupation with 
causality research is that this method works. The con- 
trivances designed according to the scientific theories 
run the way the theories predicted and thus provide a 
pragmatic verification for their correctness. On the 
other hand the magic devices did not come up to expec- 
tations and do not bear witness to the magic world 

It is obvious that it is also impossible to demonstrate 
satisfactorily by ratiocination that the alter ego is a 
being that aims purposively at ends. But the same 
pragmatic proof that can be advanced in favor of the 
exclusive use of causal research in the field of nature 
can be advanced in favor of the exclusive use of teleo- 
logical methods in the field of human action. It works, 
while the idea of dealing with men as if they were 
stones or mice does not work. It works not only in the 
search for knowledge and theories but no less in daily 

The positivist arrives at his point of view surrepti- 
tiously. He denies to his fellow men the faculty of 
choosing ends and the means to attain these ends, but 
at the same time he claims for himself the ability to 
choose consciously between various methods of scien- 
tific procedure. He shifts his ground as soon as it comes 


to problems of engineering, whether technological or 
"social." He designs plans and policies which cannot be 
interpreted as merely being automatic reactions to stim- 
uli. He wants to deprive all his fellows of the right to 
act in order to reserve this privilege for himself alone. 
He is a virtual dictator. 

As the behaviorist tells us, man can be thought of as 
"an assembled organic machine ready to run." 3 He dis- 
regards the fact that while machines run the way the 
engineer and the operator make them run, men run 
spontaneously here and there. "At birth human infants, 
regardless of their heredity, are as equal as Fords." 4 
Starting from this manifest falsehood, the behaviorist 
proposes to operate the "human Ford" the way the 
operator drives his car. He acts as if he owned human- 
ity and were called upon to control and to shape it ac- 
cording to his own designs. For he himself is above the 
law, the godsent ruler of mankind. 5 

3. Watson, p. 269. 

4. Horace M. Kallen, "Behaviorism," Encyclopaedia of the Social 
Sciences, 2, 498. 

5. Karl Mannheim developed a comprehensive plan to pro- 
duce the "best possible" human types by "deliberately" reorganizing 
the various groups of social factors. "We," that is Karl Mannheim and 
his friends, will determine what "the highest good of society and the 
peace of mind of the individual" require. Then "we" will revamp 
mankind. For our vocation is "the planned guidance of people's lives." 
Mannheim, Man and Society in an Age of Reconstruction (London, 
Routledge & Kegan Paul, 1940), p. 222. The most remarkable thing 
about such ideas is that in the thirties and forties they were styled 
democratic, liberal, and progressive. Joseph Goebbels was more mod- 
est than Mannheim in that he wanted only to revamp the German 
people and not the whole of mankind. But in his approach to the 
problem he did not differ essentially from Mannheim. In a letter of 
April 12, 1933, to Wilhelm Furtwangler he referred to the "we" to 


As long as positivism does not explain philosophies 
and theories, and the plans and policies derived from 
them, in terms of its stimulus-response scheme, it de- 
feats itself. 

2. The Collectivist Dogma 

Modern collectivist philosophy is a coarse offshoot 
of the old doctrine of conceptual realism. It has severed 
itself from the general philosophical antagonism be- 
tween realism and nominalism and hardly pays any 
attention to the continued conflict of the two schools. 
It is a political doctrine and as such employs a ter- 
minology that is seemingly different from that used in 
the scholastic debates concerning universals as well 
from that of contemporary neorealism. But the nucleus 
of its teachings does not differ from that of the medieval 
realists. It ascribes to the universals objective real exist- 
ence, even an existence superior to that of individuals, 
sometimes, even, flatly denying the autonomous exist- 
ence of individuals, the only real existence. 

What distinguishes collectivism from conceptual real- 
ism as taught by philosophers is not the method of ap- 
proach but the political tendencies implied. Collectiv- 
ism transforms the epistemological doctrine into an 

whom "the responsible task has been entrusted, to fashion out of the 
raw stuff of the masses the firm and well-shaped structure of the 
nation (denen die verantwortungsvolle Aufgabe anvertraut ist, aus 
dem rohen Stoff der Masse das feste und gestalthafte Gebilde des 
VoDces zu formen)." Berta Geissmar, Musik im Schatten der Politik 
(Zurich, Adantis Verlag, 1945), pp. 97-9. Unfortunately neither 
Mannheim nor Goebbels told us who had entrusted them with the task 
of reconstructing and re-creating men. 


ethical claim. It tells people what they ought to do. It 
distinguishes between the true collective entity to 
which people owe loyalty and spurious pseudo entities 
about which they ought not to bother at all. There is no 
uniform collectivist ideology, but many collectivist doc- 
trines. Each of them extols a different collectivist entity 
and requests all decent people to submit to it. Each 
sect worships its own idol and is intolerant of all rival 
idols. Each ordains total subjection of the individual, 
each is totalitarian. 

The particularist character of the various collectivist 
doctrines could easily be ignored because they regu- 
larly start with the opposition between society in gen- 
eral and individuals. In this antithesis there appears 
only one collective comprehending all individuals. 
There cannot therefore arise any rivalry among a mul- 
titude of collective entities. But in the further course 
of the analysis a special collective is imperceptibly sub- 
stituted for the comprehensive image of the unique 
great society. 

Let us first examine the concept of society in general. 

Men cooperate with one another. The totality of 
interhuman relations engendered by such cooperation 
is called society. Society is not an entity in itself. It is 
an aspect of human action. It does not exist or live out- 
side of the conduct of people. It is an orientation of hu- 
man action. Society neither thinks nor acts. Individuals 
in thinking and acting constitute a complex of relations 
and facts that are called social relations and facts. 

The issue has been confused by an arithmetical meta- 
phor. Is society, people asked, merely a sum of individ- 


uals or is it more than this and thereby an entity en- 
dowed with independent reality? The question is non- 
sensical. Society is neither the sum of individuals nor 
more nor less. Arithmetical concepts cannot be applied 
to the matter. 

Another confusion arises from the no less empty ques- 
tion whether society is — in logic and in time — anterior 
to individuals or not. The evolution of society and that 
of civilization were not two distinct processes but one 
and the same process. The biological passing of a spe- 
cies of primates beyond the level of a mere animal 
existence and their transformation into primitive men 
implied already the development of the first rudiments 
of social cooperation. Homo sapiens appeared on the 
stage of earthly events neither as a solitary food-seeker 
nor as a member of a gregarious flock, but as a being 
consciously cooperating with other beings of his own 
kind. Only in cooperation with his fellows could he de- 
velop language, the indispensable tool of thinking. We 
cannot even imagine a reasonable being living in per- 
fect isolation and not cooperating at least with members 
of his family, clan, or tribe. Man as man is necessarily a 
social animal. Some sort of cooperation is an essential 
characteristic of his nature. But awareness of this fact 
does not justify dealing with social relations as if they 
were something else than relations or with society as 
if it were an independent entity outside or above the 
actions of individual men. 

Finally there are the misconstructions caused by the 
organismic metaphor. We may compare society to a bi- 
ological organism. The tertium comparationis is the fact 


that division of labor and cooperation exist among the 
various parts of a biological body as among the various 
members of society. But the biological evolution that 
resulted in the emergence of the structure-function 
systems of plant and animal bodies was a purely physio- 
logical process in which no trace of a conscious activity 
on the part of the cells can be discovered. On the other 
hand, human society is an intellectual and spiritual phe- 
nomenon. In cooperating with their fellows, individuals 
do not divest themselves of their individuality. They 
retain the power to act antisocially, and often make use 
of it. Its place in the structure of the body is invariably 
assigned to each cell. But individuals spontaneously 
choose the way in which they integrate themselves into 
social cooperation. Men have ideas and seek chosen 
ends, while the cells and organs of the body lack such 

Gestalt psychology passionately rejects the psycho- 
logical doctrine of associationism. It ridicules the con- 
ception of "a sensory mosaic which nobody has ever 
observed" and teaches that "analysis if it wants to re- 
veal the universe in its completeness has to stop at the 
wholes, whatever their size, which possess functional 
reality." * Whatever one may think about Gestalt psy- 
chology, it is obvious that it has no reference at all to 
the problems of society. It is manifest that nobody has 
ever observed society as a whole. What can be observed 
is always actions of individuals. In interpreting the var- 
ious aspects of the individual's actions, the theorists 

1. K. Koffka, "Gestalt," Encyclopaedia of the Social Sciences, 6, 


develop the concept of society. There cannot be any 
question of understanding "the properties of parts from 
the properties of wholes." 2 There are no properties of 
society that cannot be discovered in the conduct of its 

In contrasting society and the individual and in deny- 
ing to the latter any "true" reality, the collectivist doc- 
trines look upon the individual merely as a refractory 
rebel. This sinful wretch has the impudence to give 
preference to his petty selfish interests as against the 
sublime interests of the great god society. Of course, 
the collectivist ascribes this eminence only to the right- 
ful social idol, not to one of the pretenders. 

But who pretender is, and who is king, 
God bless us all — that's quite another thing. 

When the collectivist extols the state, what he means 
is not every state but only that regime of which he ap- 
proves, no matter whether this legitimate state exists 
already or has to be created. For the Czech irredentists 
in the old Austria and the Irish irredentists in the 
United Kingdom the states whose governments resided 
in Vienna and in London were usurpers; their rightful 
state did not yet exist. Especially remarkable is the 
terminology of the Marxians. Marx was bitterly hostile 
to the Prussian state of the Hohenzollern. To make it 
clear that the state which he wanted to see omnipotent 
and totalitarian was not that state whose rulers resided 
in Berlin, he called the future state of his program not 
state but society. The innovation was merely verbal. 

2. Ibid., p. 645. 


For what Marx aimed at was to abolish any sphere of 
the individual's initiative action by transferring the con- 
trol of all economic activities to the social apparatus of 
compulsion and repression which is commonly called 
state or government. The hoax did not fail to beguile 
lots of people. Even today there are still dupes who 
think that there is a difference between state socialism 
and other types of socialism. 

The confusion of the concepts of society and of state 
originated with Hegel and Schelling. It is customary to 
distinguish two schools of Hegelians: the left wing and 
the right wing. The distinction refers only to the atti- 
tude of these authors toward the Kingdom of Prussia 
and the doctrines of the Prussian Union Church. The 
political creed of both wings was essentially the same. 
Both advocated government omnipotence. It was a left- 
wing Hegelian, Ferdinand Lassalle, who most clearly 
expressed the fundamental thesis of Hegelianism: "The 
State is God." 3 Hegel himself had been a little more 
cautious. He only declared that it is "the course of 
God through the world that constitutes the State" and 
that in dealing with the State one must contemplate 
"the Idea, God as actual on earth." 4 

The collectivist philosophers fail to realize that what 
constitutes the state is the actions of individuals. The 
legislators, those enforcing the laws by force of arms, 
and those yielding to the dictates of the laws and the 
police constitute the state by their behavior. In this 

3. Gustav Mayer, Lassalleana, Archiv fur Geschichte der Sozialis- 
mus, 1, 196. 

4. Hegel, Philosophy of Bight, sec. 258. 


sense alone is the state real. There is no state apart from 
such actions of individual men. 

3. The Concept of the Social Sciences 

The collectivist philosophy denies that there are such 
things as individuals and actions of individuals. The 
individual is merely a phantom without reality, an il- 
lusory image invented by the pseudo philosophy of the 
apologists of capitalism. Consequently collectivism re- 
jects the concept of a science of human action. As it 
sees it, the only legitimate treatment of those problems 
that are not dealt with by the traditional natural sci- 
ences is provided by what they call the social sciences. 

The social sciences are supposed to deal with group 
activities. In their context the individual counts only 
as a member of a group. 1 But this definition implies 
that there are actions in which the individual does not 
act as a member of a group and which therefore do not 
interest the social sciences. If this is so, it is obvious 
that the social sciences deal only with an arbitrarily 
selected fraction of the whole field of human action. 

In acting, man must necessarily choose between var- 
ious possible modes of acting. Limiting their analysis 
to one class of actions only, the social sciences renounce 
in advance any attempt to investigate the ideas that de- 
termine the individual's choice of a definite mode of 
conduct. They cannot deal with judgments of value 
which in any actual situation make a man prefer act- 

1. E. R. A. Seligman, '"What Are the Social Sciences?" Encyclo- 
paedia of the Social Sciences, 1, 3. 


ing as a group member to acting in a different manner. 
Neither can they deal with the judgments of value that 
prompt a man to act as a member of group A rather 
than as a member of any of the non-A groups. 

Man is not the member of one group only and does 
not appear on the scene of human affairs solely in the 
role of a member of one definite group. In speaking of 
social groups it must be remembered that the members 
of one group are at the same time members of other 
groups. The conflict of groups is not a conflict between 
neatly integrated herds of men. It is a conflict between 
various concerns in the minds of individuals. 

What constitutes group membership is the way a 
man acts in a concrete situation. Hence group member- 
ship is not something rigid and unchangeable. It may 
change from case to case. The same man may in the 
course of a single day perform actions each of which 
qualifies him as a member of a different group. He may 
contribute to the funds of his denomination and cast his 
ballot for a candidate who antagonizes that denomina- 
tion in essential problems. He may act at one instant 
as a member of a labor union, at another as a member 
of a religious community, at another as a member of a 
political party, at another as a member of a linguistic or 
racial group, and so on. Or he may act as an individual 
working to earn more income, to get his son into col- 
lege, to purchase a home, a car, or a refrigerator. In fact 
he always acts as an individual, always seeks ends of 
his own. In joining a group and acting as a member 
of it, he aims no less at the fulfillment of his own wishes 
than in acting without any reference to a group. He 


may join a religious community in order to seek the sal- 
vation of his soul or to attain peace of mind. He may 
join a labor union because he believes that this is the 
best means to get higher pay or to avoid being bodily 
injured by the members of the union. He may join a 
political party because he expects that the realization 
of its program will render conditions more satisfactory 
for himself and his family. 

It is vain to deal with "the activities of the individual 
as a member of a group" 2 while omitting other activ- 
ities of the individual. Group activities are essentially 
and necessarily activities of individuals who form 
groups in order to attain their ends. There are no social 
phenomena which would not originate from the activ- 
ities of various individuals. What creates a group ac- 
tivity is a definite end sought by individuals and the 
belief of these individuals that cooperating in this 
group is a suitable means to attain the end sought. A 
group is a product of human wishes and the ideas about 
the means to realize these wishes. Its roots are in the 
value judgments of individuals and in the opinions held 
by individuals about the effects to be expected from 
definite means. 

To deal with social groups adequately and com- 
pletely, one must start from the actions of the individ- 
uals. No group activity can be understood without 
analyzing the ideology that forms the group and makes 
it live and work. The idea of dealing with group activ- 
ities without dealing with all aspects of human action 
is preposterous. There is no field distinct from the field 

2. Seligman, loc. tit. 


of the sciences of human action that could be investi- 
gated by something called the social sciences. 

What prompted those who suggested the substitu- 
tion of the social sciences for the sciences of human ac- 
tion was, of course, a definite political program. In 
their eyes the social sciences were designed to oblit- 
erate the social philosophy of individualism. The cham- 
pions of the social sciences invented and popularized 
the terminology that characterizes the market economy, 
in which every individual is intent upon the realiza- 
tion of his own plan, as a planless and therefore chaotic 
system and reserves the term "plan" for the designs of 
an agency which, supported by or identical with the 
government's police power, prevents all citizens from 
realizing their own plans and designs. One can hardly 
overrate the role which the association of ideas gen- 
erated by this terminology plays in shaping the politi- 
cal tenets of our contemporaries. 

4. The Nature of Mass Phenomena 

Some people believe that the object of the social 
sciences is the study of mass phenomena. While the 
study of individual traits is of no special interest to 
them, they hope study of the behavior of social aggre- 
gates will reveal information of a really scientific char- 
acter. For these people the chief defect of the tradi- 
tional methods of historical research is that they deal 
with individuals. They esteem statistics precisely be- 
cause, as they think, it observes and records the be- 
havior of social groups. 


In fact statistics records individual traits of the mem- 
bers of arbitrarily selected groups. Whatever the prin- 
ciple may be that determined the scientist to set up a 
group, the traits recorded refer primarily to the individ- 
uals that form the group and only indirectly to the 
group. The individual members of the group are the 
units of observation. What statistics provides is infor- 
mation about the behavior of individuals forming a 

Modern statistics aims at discovering invariable con- 
nections between statistically established magnitudes 
by measuring their correlation. In the field of the sci- 
ences of human action this method is absurd. This has 
been clearly demonstrated by the fact that many coeffi- 
cients of correlation of a high numerical value have 
been calculated which undoubtedly do not indicate any 
connection between the two groups of facts. 1 

Social phenomena and mass phenomena are not 
things outside and above individual phenomena. They 
are not the cause of individual phenomena. They are 
produced either by the cooperation of individuals or 
by parallel action. The latter may be either independent 
or imitative. This is valid also with regard to antisocial 
actions. The intentional killing of a man by another 
man is as such merely a human action and would have 
no other significance in a hypothetical (and irrealiza- 
ble) state in which there was no cooperation between 
men. It becomes a crime, murder, in a state where social 

1. M. R. Cohen and E. Nagel, An Introduction to Logic and Scien- 
tific Method (New York, Harcourt, Brace, 1934), p. 317. 


cooperation precludes homicide except in cases strictly 
determined by the laws of this society. 

What is commonly called a mass phenomenon is the 
frequent repetition and recurrence of a definite individ- 
ual phenomenon. The proposition: In the West bread 
is an article of mass consumption, means: In the West 
the immense majority of men eat bread daily. They do 
not eat bread because it is an article of mass consump- 
tion. Bread is an article of mass consumption because 
practically everybody eats a piece of bread each day. 
From this point of view one may appreciate the endeav- 
ors of Gabriel Tarde to describe imitation and repeti- 
tion as fundamental factors of social evolution. 2 

The champions of the social sciences criticize the his- 
torians for concentrating their attention upon the ac- 
tions of individuals and neglecting the conduct of the 
many, the immense majority, the masses. The critique is 
spurious. A historian who deals with the spread of the 
Christian creed and of the various churches and denom- 
inations, with the events that resulted in the emergence 
of integrated linguistic groups, with the European colo- 
nization of the Western hemisphere, with the rise of 
modern capitalism certainly does not overlook the be- 
havior of the many. However, the main task of history 
is to indicate the relation of the individuals' actions to 
the course of affairs. Different individuals influence his- 
torical change in different ways. There are pioneers who 
conceive new ideas and design new modes of thinking 
and acting; there are leaders who guide people along 

2. C. Tarde, Les lois de I'imttation, 3d ed. Paris, 1900. 


the way these people want to walk, and there are the 
anonymous masses who follow the leaders. There can 
be no question of writing history without the names of 
the pioneers and the leaders. The history of Christian- 
ity cannot pass over in silence such men as Saint Paul, 
Luther, and Calvin, nor can the history of seventeenth- 
century England fail to analyze the roles of Cromwell, 
Milton, and William III. To ascribe the ideas producing 
historical change to the mass psyche is a manifestation 
of arbitrary metaphysical prepossession. The intellec- 
tual innovations which August Comte and Buckle 
rightly considered the main theme of the study of his- 
tory are not achievements of the masses. Mass move- 
ments are not inaugurated by anonymous nobodys but 
by individuals. We do not know the names of the men 
who in the early days of civilization accomplished the 
greatest exploits. But we are certain that also the tech- 
nological and institutional innovations of those early 
ages were not the result of a sudden flash of inspiration 
that struck the masses but the work of some individuals 
who by far surpassed their fellow men. 

There is no mass psyche and no mass mind but only 
ideas held and actions performed by the many in en- 
dorsing the opinions of the pioneers and leaders and 
imitating their conduct. Mobs and crowds too act only 
under the direction of ringleaders. The common men 
who constitute the masses are characterized by lack of 
initiative. They are not passive, they also act, but they 
act only at the instigation of abetters. 

The emphasis laid by sociologists upon mass phe- 
nomena and their idolization of the common man are 


an offshoot of the myth that all men are biologically 
equal. Whatever differences exist between individuals 
are caused, it is maintained, by postnatal circumstances. 
If all people equally enjoyed the benefits of a good edu- 
cation, such differences would never appear. The sup- 
porters of this doctrine are at a loss to explain the dif- 
ferences among graduates of the same school and the 
fact that many who are self-taught far excel the doctors, 
masters, and bachelors of the most renowned univer- 
sities. They fail to see that education cannot convey to 
pupils more than the knowledge of their teachers. Edu- 
cation rears disciples, imitators, and routinists, not pio- 
neers of new ideas and creative geniuses. The schools 
are not nurseries of progress and improvement but 
conservatories of tradition and unvarying modes of 
thought. The mark of the creative mind is that it defies 
a part of what it has learned or, at least, adds something 
new to it. One utterly misconstrues the feats of the 
pioneer in reducing them to the instruction he got from 
his teachers. No matter how efficient school training 
may be, it would only produce stagnation, orthodoxy, 
and rigid pedantry if there were no uncommon men 
pushing forward beyond the wisdom of their tutors. 

It is hardly possible to mistake more thoroughly the 
meaning of history and the evolution of civilization 
than by concentrating one's attention upon mass phe- 
nomena and neglecting individual men and their ex- 
ploits. No mass phenomenon can be adequately treated 
without analyzing the ideas implied. And no new ideas 
spring from the mythical mind of the masses. 

Chapter 12. Psychology and Thymology 

1. Naturalistic Psychology and Thymology 

Many authors believe that psychology is basic to the 
social sciences, even that it comprehends them all. 

Insofar as psychology proceeds with the experimental 
methods of physiology, these claims are manifestly un- 
warranted. The problems investigated in the laborato- 
ries of the various schools of experimental psychology 
have no more reference to the problems of the sciences 
of human action than those of any other scientific dis- 
cipline. Most of them are even of no use to praxeology, 
economics, and all the branches of history. In fact, no- 
body ever tried to show how the findings of naturalistic 
psychology could be utilized for any of these sciences. 

But the term "psychology" is applied in another sense 
too. It signifies the cognition of human emotions, moti- 
vations, ideas, judgments of value and volitions, a fac- 
ulty indispensable to everybody in the conduct of daily 
affairs and no less indispensable to the authors of po- 
ems, novels, and plays as well as to historians. Modern 
epistemology calls this mental process of the historians 
the specific understanding of the historical sciences of 
human action. Its function is twofold: it establishes, 
on the one hand, the fact that, motivated by definite 
value judgments, people have engaged in definite ac- 
tions and applied definite means to attain the ends they 



seek. It tries, on the other hand, to evaluate the effects 
and the intensity of the effects of an action, its bearing 
upon the further course of events. 

The specific understanding of the historical disci- 
plines is not a mental process exclusively resorted to 
by historians. It is applied by everybody in daily inter- 
course with all his fellows. It is a technique employed 
in all interhuman relations. It is practiced by children 
in the nursery and kindergarten, by businessmen in 
trade, by politicians and statesmen in affairs of state. 
All are eager to get information about other people's 
valuations and plans and to appraise them correctly. 
People as a rule call this insight into the minds of other 
men psychology. Thus, they say a salesman ought to 
be a good psychologist, and a political leader should be 
an expert in mass psychology. This popular use of the 
term "psychology" must not be confused with the psy- 
chology of any of the naturalistic schools. When Dilthey 
and other epistemologists declared that history must be 
based on psychology, what they had in mind was this 
mundane or common-sense meaning of the term. 

To prevent mistakes resulting from the confusion of 
these two entirely different branches of knowledge it 
is expedient to reserve the term "psychology" for natu- 
ralistic psychology and to call the knowledge of human 
valuations and volitions "thymology." * 

1. Some writers, for instance, Santayana, employed the term "lit- 
erary psychology." See his book Scepticism and Animal Faith, ch. 24. 
However, the use of this term seems inadvisable, not only because it 
was employed in a pejorative sense by Santayana as well as by many 
representatives of naturalistic psychology, but because it is impossible 
to form a corresponding adjective. "Thymology" is derived from the 


Thymology is on the one hand an offshoot of intro- 
spection and on the other a precipitate of historical ex- 
perience. It is what everybody learns from intercourse 
with his fellows. It is what a man knows about the way 
in which people value different conditions, about their 
wishes and desires and their plans to realize these 
wishes and desires. It is the knowledge of the social 
environment in which a man lives and acts or, with 
historians, of a foreign milieu about which he has 
learned by studying special sources. If an epistemolo- 
gist states that history has to be based on such knowl- 
edge as thymology, he simply expresses a truism. 

While naturalistic psychology does not deal at all 
with the content of human thoughts, judgments, de- 
sires, and actions, the field of thymology is precisely 
the study of these phenomena. 

The distinction between naturalistic psychology and 
physiology on the one hand and thymology on the 
other hand can best be illustrated by referring to the 
methods of psychiatry. Traditional psychopathology 
and neuropathology deal with the physiological aspects 
of the diseases of the nerves and the brain. Psychoa- 

Greek ivrft, which Homer and other authors refer to as the seat of 
the emotions and as the mental faculty of the living body by means of 
which thinking, willing, and feeling are conducted. See Wilhelm von 
Volkmann, Lehrbuch der Psychologie (Cothen, 1884), 1, 57-9; Erwin 
Rohde, Psyche, trans, by W. B. Hillis (London, 1925), p. 50; Richard 
B. Onians, The Origins of European Thought about the Body, the 
Mind, the Soul, the World, Time, and Fate (Cambridge, 1951), pp. 
49-56. Recently Professor Hermann Friedmann employed the term 
Thymologie with a somewhat different connotation. See his book Das 
Gemiit, Gedanken zu einer Thymologie (Munich, C. H. Beck, 1956), 
pp. 2-16. 


nalysis deals with their thymological aspects. The object 
of its investigations is ideas and the conscious aiming 
at ends that come into conflict with physiological im- 
pulses. Ideas urge individuals to suppress certain 
natural drives, especially such as the sex impulse. But 
the attempts to repress them do not always succeed 
fully. The impulses are not eradicated, merely relegated 
to a hiding place, and take their vengeance. From the 
depth they exert a disturbing influence on the con- 
scious life and conduct of the individual. Psychoan- 
alytic therapy tries to remove these neurotic troubles 
by bringing the conflict into the full consciousness of 
the patient. It heals with ideas, not with drugs or surgi- 
cal operations. 

It is customary to assert that psychoanalysis deals 
with irrational factors influencing human conduct. This 
statement needs interpretation in order to prevent con- 
fusion. All ultimate ends aimed at by men are beyond 
the criticism of reason. Judgments of value can be 
neither justified nor refuted by reasoning. The terms 
"reasoning" and "rationality" always refer only to the 
suitability of means chosen for attaining ultimate ends. 
The choice of ultimate ends is in this sense always ir- 

The sex impulse and the urge to preserve one's own 
vital forces are inherent in the animal nature of man. 
If man were only an animal and not also a valuing 
person, he would always yield to the impulse that at 
the instant is most powerful. The eminence of man con- 
sists in the fact that he has ideas and, guided by them, 
chooses between incompatible ends. He chooses also 


between life and death, between eating and hunger, 
between coition and sexual abstinence. 

In earlier days people were prepared to assume that 
there was no sense at all in the exceptional behavior 
of neurotics. Freud demonstrated that the seemingly 
senseless acts of the neurotic are designed to attain 
definite ends. The ends the neurotic wants to attain 
may differ from those for which normal people strive, 
and — very often — the means the neurotic resorts to are 
not suitable for their realization. But the fact that 
means chosen are not fit to attain the ends sought does 
not qualify an action as irrational. 

To make mistakes in pursuing one's ends is a wide- 
spread human weakness. Some err less often than 
others, but no mortal man is omniscient and infal- 
lible. Error, inefficiency, and failure must not be con- 
fused with irrationality. He who shoots wants, as a rule, 
to hit the mark. If he misses it, he is not "irrational"; he 
is a poor marksman. The doctor who chooses the wrong 
method to treat a patient is not irrational; he may be an 
incompetent physician. The farmer who in earlier ages 
tried to increase his crop by resorting to magic rites 
acted no less rationally than the modern fanner who 
applies more fertilizer. He did what according to his — 
erroneous — opinion was appropriate to his purpose. 

What characterizes the neurotic as such is not the 
fact that he resorts to unsuitable means but that he fails 
to come to grips with the conflicts that confront 
civilized man. Life in society requires that the individ- 
ual suppress instinctive urges present in every animal. 
We may leave it undecided whether the impulse of 


aggression is one of these innate urges. There is no 
doubt that life in society is incompatible with indul- 
gence in the animal habits of satisfying sexual appetites. 
Perhaps there are better methods of regulating sexual 
intercourse than those resorted to in actual society. 
However that may be, it is a fact that the adopted 
methods put too much strain upon the minds of some 
individuals. These men and women are at a loss to 
solve problems which luckier people get over. Their 
dilemma and embarrassment make them neurotic. 

Many spurious objections have been raised to the 
philosophy of rationalism. Various nineteenth-century 
schools of thought completely misinterpreted the es- 
sence of the rationalist doctrine. As against these mis- 
interpretations it is important to realize that eighteenth- 
century classical rationalism was defective only in the 
treatment of some subordinate and merely incidental 
issues and that these minor deficiencies could easily 
lead undiscerning critics astray. 

The fundamental thesis of rationalism is unassailable. 
Man is a rational being; that is, his actions are guided 
by reason. The proposition: Man acts, is tantamount to 
the proposition: Man is eager to substitute a state of 
affairs that suits him better for a state of affairs that 
suits him less. In order to achieve this, he must employ 
suitable means. It is his reason that enables him to find 
out what is a suitable means for attaining his chosen end 
and what is not. 

Rationalism was right furthermore in stressing that 
there is a far-reaching unanimity among people with 
regard to the choice of ultimate ends. With almost neg- 


ligible exceptions, all people want to preserve their lives 
and health and improve the material conditions of 
their existence. It is this fact that determines both co- 
operation and competition among men. But in dealing 
with this point rationalist philosophers committed se- 
rious blunders. 

In the first place they assumed that all men are en- 
dowed with the same power of reasoning. They ignored 
the difference between clever people and dullards, even 
that between the pioneering genius and the vast crowds 
of simple routinists who at best can espouse the doc- 
trines developed by the great thinkers but more often 
are incapable of comprehending them. As the ration- 
alists saw it, every sane adult was intelligent enough 
to grasp the meaning of the most complicated theory. 
If he failed to achieve it, the fault lay not in his intel- 
lect but in his education. Once all people have enjoyed 
a perfect education, all will be as wise and judicious 
as the most eminent sage. 

The second shortcoming of rationalism was its neg- 
lect of the problem of erroneous thinking. Most of the 
rationalist philosophers failed to see that even honest 
men, sincerely devoted to the search for truth, could 
err. This prepossession prevented them from doing jus- 
tice to the ideologies and the metaphysical doctrines of 
the past. A doctrine of which they disapproved could 
in their opinion have been prompted only by purpose- 
ful deceit. Many of them dismissed all religions as the 
product of the intentional fraud of wicked impostors. 

Yet these shortcomings of classical rationalism do not 


excuse any of the passionate attacks of modern irra- 

2. Thymology and Praxeology 

Thymology has no special relation to praxeology and 
economics. The popular belief that modern subjective 
economics, the marginal utility school, is founded on 
or closely connected with "psychology" is mistaken. 

The very act of valuing is a thymological phenome- 
non. But praxeology and economics do not deal with 
the thymological aspects of valuation. Their theme is 
acting in accordance with the choices made by the 
actor. The concrete choice is an offshoot of valuing. But 
praxeology is not concerned with the events which 
within a man's soul or mind or brain produce a definite 
decision between an A and a B. It takes it for granted 
that the nature of the universe enjoins upon man choos- 
ing between incompatible ends. Its subject is not the 
content of these acts of choosing but what results from 
them: action. It does not care about what a man chooses 
but about the fact that he chooses and acts in compli- 
ance with a choice made. It is neutral with regard to 
the factors that determine the choice and does not arro- 
gate to itself the competence to examine, to revise, or 
to correct judgments of value. It is wertfrei. 

Why one man chooses water and another man wine 
is a thymological (or, in the traditional terminology, 
psychological) problem. But it is of no concern to praxe- 
ology and economics. 


The subject matter of praxeology and of that part of 
it which is so far the best developed — economics — is 
action as such and not the motives that impel a man to 
aim at definite ends. 

3. Thymology as a Historical Discipline 

Psychology in the sense in which the term is em- 
ployed today by the discipline called psychology is a 
natural science. It is not the task of an epistemological 
treatise dealing with the sciences of human action to 
raise the question as to what distinguishes this branch 
of the natural sciences from general physiology. 

Psychology in the sense of thymology is a branch of 
history. It derives its knowledge from historical expe- 
rience. We shall deal in a later section with introspec- 
tion. At this point is suffices to stress the fact that the 
thymological observation both of other people's choices 
and of the observer's own choosing necessarily always 
refers to the past, in the way that historical experience 
does. There is no method available which would pro- 
duce in this field something analogous to what the natu- 
ral sciences consider an experimentally established fact. 
All that thymology can tell us is that in the past definite 
men or groups of men were valuing and acting in a defi- 
nite way. Whether they will in the future value and act 
in the same way remains uncertain. All that can be 
asserted about their future conduct is speculative an- 
ticipation of the future based on the specific under- 
standing of the historical branches of the sciences of 
human action. 


There is no difference in this regard between the 
thymology of individuals and that of groups. What is 
called Volkerpsychologie and mass psychology too are 
historical disciplines. What is called a nation's "char- 
acter" is at best the traits displayed by members of that 
nation in the past. It remains uncertain whether or not 
the same traits will manifest themselves in the future 

All animals are endowed with the impulse of self- 
preservation. They resist forces detrimental to their sur- 
vival. If attacked, they defend themselves or counter- 
attack or seek safety in flight. Biology is in a position 
to predict, on the basis of observation of the behavior 
of various species of animals, how a healthy individual 
of each species will respond to attack. No such apodictic 
forecast concerning the conduct of men is possible. 
True, the immense majority of men are driven by the 
animal impulse of self-preservation. But there are ex- 
ceptions. There are men who are led by definite ideas 
to choose nonresistance. There are others whom hope- 
lessness induces to abstain from any attempt to resist or 
to flee. Before the event it is impossible to know with 
certainty how an individual will react. 

In retrospect historical analysis tries to show us that 
the outcome could not have been different from what 
it really was. Of course, the effect is always the neces- 
sary resultant of the factors operating. But it is im- 
possible to deduce with certainty from thymological 
experience the future conduct of men, whether individ- 
uals or groups of individuals. All prognostications based 
on thymological knowledge are specific understanding 


of the future as practiced daily by everyone in their 
actions and especially also by statesmen, politicians, 
and businessmen. 

What thymology achieves is the elaboration of a cata- 
logue of human traits. It can moreover establish the 
fact that certain traits appeared in the past as a rule 
in connection with certain other traits. But it can never 
predict in the way the natural sciences can. It can never 
know in advance with what weight the various factors 
will be operative in a definite future event. 

4. History and Fiction 

History tries to describe past events as they really 
happened. It aims at faithful representation. Its con- 
cept of truth is correspondence with what was once 

Epic and dramatic fiction depict what is to be con- 
sidered true from the point of view of thymological in- 
sight, no matter whether the story told really happened 
or not. It is not our task to deal with the effects the 
author wants to bring about by his work and with its 
metaphysical, aesthetic, and moral content. Many 
writers seek merely to entertain the public. Others are 
more ambitious. In telling a story, they try to suggest a 
general view of man's fate, of life and death, of human 
effort and suffering, of success and frustration. Their 
message differs radically from that of science as well as 
from that of philosophy. Science, in describing and in- 
terpreting the universe, relies entirely upon reason and 
experience. It shuns propositions which are not open to 


demonstration by means of logic (in the broadest sense 
of the term that includes mathematics and praxeology) 
and experience. It analyzes parts of the universe with- 
out making any statements about the totality of things. 
Philosophy tries to build upon the foundations laid by 
science a comprehensive world view. In striving after 
this end, it feels itself bound not to contradict any of the 
well-founded theses of contemporary science. Thus its 
path too is confined by reason and experience. 

Poets and artists approach things and problems in 
another mood. In dealing with a single aspect of the 
universe they are always dealing with the whole. Nar- 
ration and description, the portrayal of individual 
things and of particular events, is for them only a 
means. The essential feature of their work is beyond 
words, designs, and colors. It is in the ineffable feelings 
and ideas that activated the creator and move the 
reader and spectator. When Konrad Ferdinand Meyer 
described a Roman fountain and Rainer Maria Rilke a 
caged panther, they did not simply portray reality. 
They caught a glimpse of the universe. In Flaubert's 
novel it is not Madame Bovary's sad story that is of pri- 
mary concern; it is something that reaches far beyond 
the fate of this poor woman. There is a fundamental 
difference between the most faithful photograph and 
a portrait painted by an artist. What characterizes a 
work of literature and art as such is not its reporting 
of facts but the way it reveals an aspect of the uni- 
verse and man's attitude toward it. What makes an 
artist is not experience and knowledge as such. It is his 
particular reaction to the problems of human existence 


and fate. It is Erlehnis, a purely personal response to 
the reality of his environment and his experience. 

Poets and artists have a message to tell. But this 
message refers to ineffable feelings and ideas. It is not 
open to utterance in an unambiguous way precisely 
because it is ineffable. We can never know whether 
what we experience — erleben — in enjoying their work 
is what they experienced in creating it. For their work 
is not simply a communication. Apart from what it com- 
municates, it stirs up in the reader and spectator feel- 
ings and ideas which may differ from those of its au- 
thor. It is a hopeless task to interpret a symphony, a 
painting, or a novel. The interpreter at best tries to tell 
us something about his reaction to the work. He cannot 
tell us with certainty what the creator's meaning was 
or what other people may see in it. Even if the creator 
himself provides a commentary on his work, as in the 
case of program-music, this uncertainty remains. There 
are no words to describe the ineffable. 

What history and fiction have in common is the fact 
that both are based on knowledge concerning the hu- 
man mind. They operate with thymological experience. 
Their method of approach is the specific understanding 
of human valuations, of the way people react to the 
challenge of their natural and social environment. But 
then their ways part. What the historian has to tell is 
completely expressed in his report. He communicates to 
the reader all he has established. His message is exo- 
teric. There is nothing that would go beyond the con- 
tent of his book as intelligible to competent readers. 


It may happen that the study of history, or for that 
matter also the study of the natural sciences, rouses in 
the mind of a man those ineffable thoughts and views 
of the universe as a whole which are the mark of the 
empathic grasp of totality. But this does not alter the 
nature and character of the historian's work. History is 
unconditionally the search after facts and events that 
really happened. 

Fiction is free to depict events that never occurred. 
The writer creates, as people say, an imaginary story. 
He is free to deviate from reality. The tests of truth that 
apply to the work of the historian do not apply to his 
work. Yet his freedom is limited. He is not free to defy 
the teachings of thymological experience. It is not a 
requirement of novels and plays that the things related 
should really have happened. It is not even necessary 
that they could happen at all; they may introduce 
heathen idols, fairies, animals acting in human manner, 
ghosts and other phantoms. But all the characters of a 
novel or a play must act in a thymologically intelligible 
way. The concepts of truth and falsehood as applied to 
epic and dramatic works refer to thymological plausi- 
bility. The author is free to create fictitious persons and 
plots but he must not try to invent a thymology — psy- 
chology — different from that derived from the observa- 
tion of human conduct. 

Fiction, like history, does not deal with average man 
or man in the abstract or general man — homme general 1 

1. P. Lacombe, De Vhistoire consuterSe comme science (2d ed. 
Paris, 1930), pp. 35-41. 


— but with individual men and individual events. Yet 
even here there is a conspicuous difference between 
history and fiction. 

The individuals with whom history deals may be and 
often are groups of individuals, and the individual 
events with which it deals are events that affected such 
groups of individuals. The single individual is a subject 
of the historian's interest primarily from the point of 
view of the influence his actions exercised upon a multi- 
tude of people or as a typical specimen representative 
of whole groups of individuals. The historian does not 
bother about other people. But for the writer of fiction 
it is always only the individual as such that counts, no 
matter what his influence upon other people or whether 
or not he is to be considered typical. 

This has been entirely misunderstood in some doc- 
trines about literature developed in the second part of 
the nineteenth century. The authors of these doctrines 
were misled by contemporary changes in the treatment 
of history. While older historians wrote chiefly about 
great men and affairs of state, modern historians shifted 
to the history of ideas, institutions, and social condi- 
tions. At a time when the prestige of science far sur- 
passed that of literature, and positivist zealots sneered 
at fiction as a useless pastime, writers tried to justify 
their profession by representing it as a branch of scien- 
tific research. In the opinion of fimile Zola the novel 
was a sort of descriptive economics and social psychol- 
ogy, to be based upon punctilious exploration of particu- 
lar conditions and institutions. Other authors went even 
further and asserted that only the fate of classes, na- 


tions, and races, not that of individuals, is to be treated 
in novels and plays.They obliterated the distinction be- 
tween a statistical report and a "social" novel or play. 

The books and plays written in compliance with the 
precepts of this naturalistic aesthetics were clumsy 
pieces of work. No outstanding writer paid more than 
lip service to these principles. Zola himself was very re- 
strained in the application of his doctrine. 

The theme of novels and plays is individual man as 
he lives, feels, and acts, and not anonymous collective 
wholes. The milieu is the background of the portraits 
the author paints; it is the state of external affairs to 
which the characters respond by moves and acts. There 
is no such thing as a novel or play whose hero is an ab- 
stract concept such as a race, a nation, a caste, or a 
political party. Man alone is the perennial subject of 
literature, individual real man as he lives and acts. 

The theories of the aprioristic sciences — logic, mathe- 
matics, and praxeology — and the experimental facts es- 
tablished by the natural sciences can be viewed without 
reference to the personality of their authors. In dealing 
with the problems of Euclidian geometry we are not 
concerned with the man Euclid and may forget that 
he ever lived. The work of the historian is necessarily 
colored by the historian's specific understanding of 
the problems involved, but it is still possible to discuss 
the various issues implied without referring to the his- 
torical fact that they originated from a definite author. 
No such objectivity is permitted in dealing with works 
of fiction. A novel or a play always has one hero more 
than the plot indicates. It is also a confession of the 


author and tells no less about him than about the per- 
sons in the story. It reveals his innermost soul. 

It has sometimes been asserted that there is more 
truth in fiction than in history. Insofar as the novel or 
play is looked upon as a disclosure of the author's mind, 
this is certainly correct. The poet always writes about 
himself, always analyzes his own soul. 

5. Rationalization 

The thymological analysis of man is essential in the 
study of history. It conveys all we can know about ulti- 
mate ends and judgments of value. But as has been 
pointed out above, it is of no avail for praxeology and 
of little use in dealing with the means applied to attain 
ends sought. 

With regard to the choice of means all that matters 
is their suitability to attain the ends sought. There is 
no other standard for appraising means. There are suit- 
able means and unsuitable means. From the point of 
view of the actor the choice of unsuitable means is al- 
ways erroneous, an inexcusable failure. 

History is called upon to explain the origin of such 
errors by resorting to thymology and the specific under- 
standing. As man is fallible and the search after appro- 
priate means is very difficult, the course of human his- 
tory is by and large a series of errors and frustration. 
Looking backward from the present state of our knowl- 
edge we are sometimes tempted to belittle past ages 
and boast of the efficiency of our time. However, even 


the pundits of the "atomic age" are not safe against er- 

Shortcomings in the choice of means and in acting 
are not always caused by erroneous thinking and inef- 
ficiency. Frequently frustration is the result of irreso- 
luteness with regard to the choice of ends. Wavering 
between various incompatible goals, the actor vacil- 
lates in his conduct of affairs. Indecision prevents him 
from marching straight toward one goal. He moves to 
and fro. He goes now toward the left, then toward the 
right. Thus he does not accomplish anything. Political, 
diplomatic, and military history has dealt amply with 
this type of irresolute action in the conduct of affairs of 
state. Freud has shown what role in the daily life of 
the individual subconscious repressed urges play in for- 
getting, mistakes, slips of the tongue or the pen, and 

A man who is obliged to justify his handling of a 
matter in the eyes of other people often resorts to a 
pretext. As the motive of his deviation from the most 
suitable way of procedure he ascribes another reason 
than that which actually prompted him. He does not 
dare to admit his real motive because he knows that 
his critics would not accept it as a sufficient justifica- 

Rationalization is the name psychoanalysis gives to 
the construction of a pretext to justify conduct in the 
actor's own mind. Either the actor is loath to admit the 
real motive to himself or he is not aware of the re- 
pressed urge directing him. He disguises the subcon- 


scious impulse by attaching to his actions reasons ac- 
ceptable to his superego. He is not consciously cheating 
and lying. He is himself a victim of his illusions and 
wishful thinking. He lacks the courage to look squarely 
at reality. As he dimly surmises that the cognition of the 
true state of affairs would be unpleasant, undermine his 
self-esteem, and weaken his resolution, he shrinks from 
analyzing the problems beyond a certain point. This 
is of course a rather dangerous attitude, a retreat from 
an unwelcome reality into an imaginary world of fancy 
that pleases better. A few steps further in the same 
direction may lead to insanity. 

However, in the lives of individuals there are checks 
that prevent such rationalizations from becoming ram- 
pant and wreaking havoc. Precisely because rationaliza- 
tion is a type of behavior common to many, peo- 
ple are watchful and even often suspect it where it 
is absent. Some are always ready to unmask their 
neighbors' sly attempts to bolster their own self-respect. 
The most cleverly constructed legends of rationalization 
cannot in the long run withstand the repeated attacks 
of debunkers. 

It is quite another thing with rationalization de- 
veloped for the benefit of social groups. That can thrive 
luxuriantly because it encounters no criticism from the 
members of the group and because the criticism of 
outsiders is dismissed as obviously biased. One of the 
main tasks of historical analysis is to study the various 
manifestations of rationalization in all fields of political 


6. Introspection 

The passionate quarrel of the introspectionists and 
anti-introspectionists refers to the problems of natural- 
istic psychology and does not affect thymology. None 
of the methods and procedures recommended by the 
anti-introspectionist schools could convey any informa- 
tion and knowledge about the phenomena which thy- 
mology explores. 

Being himself a valuing and acting ego, every man 
knows the meaning of valuing and acting. He is aware 
that he is not neutral with regard to the various states 
of his environment, that he prefers certain states to 
others, and that he consciously tries, provided the con- 
ditions for such interference on his part are given, to 
substitute a state that he likes better for one he likes 
less. It is impossible to imagine a sane human being 
who lacks this insight. It is no less impossible to con- 
ceive how a being lacking this insight could acquire it 
by means of any experience or instruction. The cate- 
gories of value and of action are primary and aprioristic 
elements present to every human mind. No science 
should or could attack the problems involved without 
prior knowledge of these categories. 

Only because we are aware of these categories do we 
know what meaning means and have a key to interpret 
other people's activities. This awareness makes us dis- 
tinguish in the external world two separate realms, that 
of human affairs and that of nonhuman things, or that of 
final causes and that of causality. It is not our task here 


to deal with causality. But we must emphasize that the 
concept of final causes does not stem from experience 
and observation of something external; it is present in 
the mind of every human being. 

It is necessary to emphasize again and again that no 
statement or proposition concerning human action can 
be made that does not imply reference to ends aimed 
at. The very concept of action is finalistic and is devoid 
of any sense and meaning if there is no referring to 
conscious aiming at chosen ends. There is no experi- 
ence in the field of human action that can be had with- 
out resorting to the category of means and ends. If the ob- 
server is not familiar with the ideology, the technology, 
and the therapeutics of the men whose behavior he ob- 
serves, he cannot make head or tail of it. He sees peo- 
ple running here and there and moving their hands, but 
he begins to understand what it is all about only when 
he begins to discover what they want to achieve. 

If in employing the term "introspection" the positivist 
refers to such statements as those expressed in the last 
four words of the sentence "Paul runs to catch the 
train," then we must say that no sane human being 
could do without resorting to introspection in every 

Chapter 13. Meaning and Use of the Study of History 

1. The Why of History 

In the eyes of the positivist philosopher the study 
of mathematics and of the natural sciences is a prepara- 
tion for action. Technology vindicates the labors of the 
experimenter. No such justification can be advanced in 
favor of the traditional methods resorted to by the his- 
torians. They should abandon their unscientific anti- 
quarianism, says the positivist, and turn to the study of 
social physics or sociology. This discipline will abstract 
from historical experience laws which could render to 
social "engineering" the same services the laws of phys- 
ics render to technological engineering. 

In the opinion of the historicist philosopher the study 
of history provides man with signposts showing him the 
ways he has to walk along. Man can succeed only if 
his actions fit into the trend of evolution. To discover 
these trend lines is the main task of history. 

The bankruptcy of both positivism and historicism 
raises anew the question about the meaning, the value, 
and the use of historical studies. 

Some self-styled idealists think that reference to a 
thirst for knowledge, inborn in all men or at least in 
the higher types of men, answers these questions satis- 
factorily. Yet the problem is to draw a boundary line 
between the thirst for knowledge that impels the phi- 



lologist to investigate the language of an African tribe 
and the curiosity that stimulates people to peer into the 
private lives of movie stars. Many historical events 
interest the average man because hearing or reading 
about them or seeing them enacted on the stage or 
screen gives him pleasant, if sometimes shuddering, 
sensations. The masses who greedily absorb newspaper 
reports about crimes and trials are not driven by 
Ranke's eagerness to know events as they really hap- 
pened. The passions that agitate them are to be dealt 
with by psychoanalysis, not by epistemology. 

The idealist philosopher's justification of history as 
knowledge for the mere sake of knowing fails to take 
into account the fact that there are certainly things 
which are not worth knowing. History's task is not to 
record all past things and events but only those that 
are historically meaningful. It is therefore necessary to 
find a criterion that makes it possible to sift what is his- 
torically meaningful from what is not. This cannot be 
done from the point of view of a doctrine which deems 
meritorious the mere fact of knowing something. 

2. The Historical Situation 

Acting man is faced with a definite situation. His ac- 
tion is a response to the challenge offered by this situa- 
tion; it is his re-action. He appraises the effects the 
situation may have upon himself, i.e., he tries to es- 
tablish what it means to him. Then he chooses and acts 
in order to attain the end chosen. 

As far as the situation can be completely described 


by the methods of the natural sciences, as a rule the 
natural sciences also provide an interpretation that en- 
ables the individual to make his decision. If a leak in the 
pipe line is diagnosed, the course of action to be re- 
sorted to is in most cases plain. Where a full descrip- 
tion of a situation requires more than reference to the 
teachings of the applied natural sciences, recourse to 
history is inevitable. 

People have often failed to realize this because they 
were deceived by the illusion that there is, between the 
past and the future, an extended space of time that can 
be called the present. As I have pointed out before, 1 
the concept of such a present is not an astronomical or 
chronometrical notion but a praxeological one. It re- 
fers to the continuation of the conditions making a 
definite kind of action possible. It is therefore different 
for various fields of action. It is, moreover, never possi- 
ble to know in advance how much of the future, of the 
time not yet past, will have to be included in what we 
call today the present. This can only be decided in 
retrospect. If a man says "At present the relations be- 
tween Ruritania and Lapputania are peaceful," it is un- 
certain whether a later retrospective recording will in- 
clude what today is called tomorrow in this period 
of present time. This question can only be answered the 
day after tomorrow. 

There is no such thing as a nonhistorical analysis of 
the present state of affairs. The examination and de- 
scription of the present are necessarily a historical ac- 
count of the past ending with the instant just passed. 

1. Mises, Human Action, p. 101. See also above, pp. 202 f. 


The description of the present state of politics or of 
business is inevitably the narration of the events that 
have brought about the present state. If, in business or 
in government, a new man takes the helm, his first task 
is to find out what has been done up to the last minute. 
The statesman as well as the businessman learns about 
the present situation from studying the records of the 

Historicism was right in stressing the fact that in 
order to know something in the field of human affairs 
one has to familiarize oneself with the way in which 
it developed. The historicists' fateful error consisted 
in the belief that this analysis of the past in itself con- 
veys information about the course future action has to 
take. What the historical account provides is the de- 
scription of the situation; the reaction depends on the 
meaning the actor gives it, on the ends he wants to at- 
tain, and on the means he chooses for their attainment. 
In 1860 there was slavery in many states of the Union. 
The most careful and faithful record of the history of 
this institution in general and in the United States in 
particular did not map out the future policies of the 
nation with regard to slavery. The situation in the 
manufacturing and marketing of motorcars that Ford 
found on the eve of his embarking upon mass produc- 
tion did not indicate what had to be done in this field of 
business. The historical analysis gives a diagnosis. The 
reaction is determined, so far as the choice of ends is 
concerned, by judgments of value and, so far as the 
choice of means is concerned, by the whole body of 


teachings placed at man's disposal by praxeology and 

Let those who want to reject the preceding state- 
ments undertake to describe any present situation — 
in philosophy, in politics, on a battlefield, on the stock 
exchange, in an individual business enterprise — without 
reference to the past. 

3. History of the Remote Past 

A skeptic may object: Granted that some historical 
studies are descriptions of the present state of affairs, 
but this is not true of all historical investigations. One 
may concede that the history of Nazism contributes to 
a better understanding of various phenomena in the 
present political and ideological situation. But what 
reference to our present worries have books on the 
Mithras cult, on ancient Chaldea, or on the early dynas- 
ties of the kings of Egypt? Such studies are merely 
antiquarian, a display of curiosity. They are useless, a 
waste of time, money, and manpower. 

Criticisms such as these are self -contradictory. On the 
one hand they admit that the present state can only 
be described by a full account of the events that have 
brought it about. On the other hand, they declare be- 
forehand that certain events cannot possibly have influ- 
enced the course of affairs that has led to the present 
state. Yet this negative statement can only be made 
after careful examination of all the material available, 
not in advance on the ground of some hasty conclusions. 


The mere fact that an event happened in a distant 
country and a remote age does not in itself prove that 
it has no bearing on the present. Jewish affairs of three 
thousand years ago influence the lives of millions of 
present-day Christian Americans more than what hap- 
pened to the American Indians as late as in the second 
part of the nineteenth century. In the present-day con- 
flict of the Roman Church and the Soviets there are 
elements that trace back to the great schism of the East- 
ern and Western churches that originated more than a 
thousand years ago. This schism cannot be examined 
thoroughly without reference to the whole history of 
Christianity from its early beginnings; the study of 
Christianity presupposes analysis of Judaism and the 
various influences — Chaldean, Egyptian, and so on — 
that shaped it. There is no point in history at which we 
can stop our investigation fully satisfied that we have 
not overlooked any important factor. Whether civiliza- 
tion must be considered a coherent process or we 
should rather distinguish a multitude of civilizations 
does not affect our problem. For there were mutual 
exchanges of ideas between these autonomous civiliza- 
tions, the extent and weight of which must be estab- 
lished by historical research. 

A superficial observer might think that the historians 
are merely repeating what their predecessors have al- 
ready said, at best occasionally retouching minor de- 
tails of the picture. Actually the understanding of the 
past is in perpetual flux. A historian's achievement con- 
sists in presenting the past in a new perspective of un- 
derstanding. The process of historical change is actu- 


ated by, or rather consists in, the ceaseless transforma- 
tion of the ideas determining human action. Among 
these ideological changes those concerning the specific 
historical understanding of the past play a conspicuous 
role. What distinguishes a later from an earlier age is, 
among other ideological changes, also the change in 
the understanding of the preceding ages. Continu- 
ously examining and reshaping our historical under- 
standing, the historians contribute their share to what 
is called the spirit of the age. 1 

4. Falsifying History 

Because history is not a useless pastime but a study 
of the utmost practical importance, people have been 
eager to falsify historical evidence and to misrepresent 
the course of events. The endeavors to mislead posterity 
about what really happened and to substitute a fabri- 
cation for a faithful recording are often inaugurated by 
the men who themselves played an active role in the 
events, and begin with the instant of their happening, 

1. Sometimes historical research succeeds in unmasking inveterate 
errors and substituting a correct account of events for an inadequate 
record even in fields that had up to then been considered fully and 
satisfactorily explored and described. An outstanding example is the 
startling discoveries concerning the history of the Roman emperors 
Maxentius, Licinius, and Constantinus and the events that ended the 
persecution of the Christians and paved the way for the victory of the 
Christian Church. (See Henri Gregoire, Les Persecutions dans I'Em- 
pire Romain in Memoires de l'Academie Royale de Belgique, Tome 46, 
Fascicule 1, 1951, especially pp. 79-89, 15S-6.) But fundamental 
changes in the historical understanding of events are more often 
brought about without any or only slight revision of the description 
of external events. 


or sometimes even precede their occurrence. To lie 
about historical facts and to destroy evidence has been 
in the opinion of hosts of statesmen, diplomats, politi- 
cians, and writers a legitimate part of the conduct of 
public affairs and of writing history. One of the main 
problems of historical research is to unmask such false- 

The falsifiers were often prompted by the desire to 
justify their own or their party's actions from the point 
of view of the moral code of those whose support or at 
least neutrality they were eager to win. Such white- 
washing is rather paradoxical if the actions concerned 
appeared unobjectionable from the point of view of 
the moral ideas of the time when they occurred, and are 
condemned only by the moral standards of the fab- 
ricator's contemporaries. 

No serious obstacles to the efforts of the historians are 
created by the machinations of the forgers and falsifiers. 
What is much more difficult for the historian is to 
avoid being misled by spurious social and economic 

The historian approaches the records equipped with 
the knowledge he has acquired in the fields of logic, 
praxeology, and the natural sciences. If this knowledge 
is defective, the result of his examination and analysis 
of the material will be vitiated. A good part of the last 
eighty years' contributions to economic and social his- 
tory is almost useless on account of the writers' insuffi- 
cient grasp of economics. The historicist thesis that the 
historian needs no acquaintance with economics and 
should even spurn it has vitiated the work of several 


generations of historians. Still more devastating was the 
effect of historicism upon those who called their publi- 
cations describing various social and business condi- 
tions of the recent past economic research. 

5. History and Humanism 

Pragmatic philosophy appreciates knowledge because 
it gives power and makes people fit to accomplish 
things. From this point of view the positivists reject his- 
tory as useless. We have tried to demonstrate the serv- 
ice that history renders to acting man in making him 
understand the situation in which he has to act. We 
have tried to provide a practical justification of history. 

But there is more than this in the study of history. It 
not only provides knowledge indispensable to prepar- 
ing political decisions. It opens the mind toward an 
understanding of human nature and destiny. It in- 
creases wisdom. It is the very essence of that much mis- 
interpreted concept, a liberal education. It is the fore- 
most approach to humanism, the lore of the specifically 
human concerns that distinguish man from other liv- 
ing beings. 

The newborn child has inherited from his ancestors 
the physiological features of the species. He does not 
inherit the ideological characteristics of human ex- 
istence, the desire for learning and knowing. What dis- 
tinguishes civilized man from a barbarian must be 
acquired by every individual anew. Protracted strenu- 
ous exertion is needed to take possession of man's spirit- 
ual legacy. 


Personal culture is more than mere familiarity with 
the present state of science, technology, and civic af- 
fairs. It is more than acquaintance with books and 
paintings and the experience of travel and of visits to 
museums. It is the assimilation of the ideas that roused 
mankind from the inert routine of a merely animal ex- 
istence to a life of reasoning and speculating. It is the 
individual's effort to humanize himself by partaking in 
the tradition of all the best that earlier generations 
have bequeathed. 

The positivist detractors of history contend that pre- 
occupation with things past diverts people's attention 
from the main task of mankind, the improvement of fu- 
ture conditions. No blame could be more undeserved. 
History looks backward into the past, but the lesson it 
teaches concerns things to come. It does not teach in- 
dolent quietism; it rouses man to emulate the deeds of 
earlier generations. It addresses men as Dante's Ulysses 
addressed his companions: 

Considerate la vostra semenza: 
Fatti non f oste a viver come bruti, 
Ma per seguir virtude e conoscenza. 1 

The dark ages were not dark because people were 
committed to study of the intellectual treasures left by 
ancient Hellenic civilization; they were dark so long as 
these treasures were hidden and dormant. Once they 

1. L'Infemo, xxvi, 118-20. In the translation by Longfellow: 

Consider ye the seed from which ye sprang; 
Ye were not made to live like unto brutes, 
But for pursuit of virtue and of knowledge. 


came to light again and began to stimulate the minds 
of the most advanced thinkers, they contributed sub- 
stantially to the inauguration of what is called today 
Western civilization. The much criticized term "Renais- 
sance" is pertinent in that it stresses the part the legacy 
of antiquity played in the evolution of all the spiritual 
features of the West. (The question whether the begin- 
ning of the Renaissance should not be dated some cen- 
turies farther back than Burckhardt set it need not 
concern us here. ) 

The scions of the barbarian conquerors who first 
began to study the ancients seriously were struck with 
awe. They realized that they and their contemporaries 
were faced with ideas they themselves could not have 
developed. They could not help thinking of the philoso- 
phy, the literature, and the arts of the classical age of 
Greece and Rome as unsurpassable. They saw no road 
to knowledge and wisdom but that paved by the an- 
cients. To qualify a spiritual achievement as modern 
had for them a pejorative connotation. But slowly, 
from the seventeenth century on, people became aware 
that the West was coming of age and creating a culture 
of its own. They no longer bemoaned the disappearance 
of a golden age of the arts and of learning, irretrievably 
lost, and no longer thought of the ancient masterpieces 
as models to be imitated but never equaled, still less 
surpassed. They came to substitute the idea of progres- 
sive improvement for the previously held idea of pro- 
gressive degeneration. 

In this intellectual development that taught modern 
Europe to know its own worth and produced the self- 


reliance of modern Western civilization, the study of 
history was paramount. The course of human affairs 
was no longer viewed as a mere struggle of ambitious 
princes and army leaders for power, wealth, and glory. 
The historians discovered in the flux of events the op- 
eration of other forces than those commonly styled 
political and military. They began to regard the histori- 
cal process as actuated by man's urge toward better- 
ment. They disagreed widely in their judgments of 
value and in their appraisal of the various ends aimed 
at by governments and reformers. But they were nearly 
unanimous in holding that the main concern of every 
generation is to render conditions more satisfactory 
than their ancestors left them. They announced prog- 
ress toward a better state of civic affairs as the main 
theme of human endeavor. 

Faithfulness to tradition means to the historian ob- 
servance of the fundamental rule of human action, 
namely, ceaseless striving to improve conditions. It 
does not mean preservation of unsuitable old institu- 
tions and clinging to doctrines long since discredited by 
more tenable theories. It does not imply any concession 
to the point of view of historicism. 

6. History and the Rise of Aggressive Nationalism 

The historian should utilize in his studies all the 
knowledge that the other disciplines place at his dis- 
posal. Inadequacy in this knowledge affects the re- 
sults of his work. 

If we were to consider the Homeric epics merely as 


historical narratives, we would have to judge them un- 
satisfactory on account of the theology or mythology 
used to interpret and explain facts. Personal and politi- 
cal conflicts between princes and heroes, the spread of 
a plague, meteorological conditions, and other happen- 
ings were attributed to the interference of gods. Mod- 
ern historians refrain from tracing back earthly events 
to supernatural causes. They avoid propositions that 
would manifestly contradict the teachings of the natural 
sciences. But they are often ignorant of economics and 
committed to untenable doctrines concerning the prob- 
lems of economic policies. Many cling to neomercan- 
tilism, the social philosophy adopted almost without 
exception by contemporary political parties and gov- 
ernments and taught at all universities. They approve 
the fundamental thesis of mercantilism that the gain 
of one nation is the damage of other nations; that no 
nation can win but by the loss of others. They think an 
irreconcilable conflict of interests prevails among na- 
tions. From this point of view many or even most his- 
torians interpret all events. The violent clash of na- 
tions is in their eyes a necessary consequence of a 
nature-given and inevitable antagonism. This antago- 
nism cannot be removed by any arrangement of in- 
ternational relations. The advocates of integral free 
trade, the Manchester or laissez-faire Liberals, are, 
they think, unrealistic and do not see that free trade 
hurts the vital interests of any nation resorting to it. 

It is not surprising that the average historian shares 
the fallacies and misconceptions prevailing among his 
contemporaries. It was, however, not the historians but 


the anti-economists who developed the modern ide- 
ology of international conflict and aggressive nation- 
alism. The historians merely adopted and applied it. It 
is not especially remarkable that in their writings they 
took the side of their own nation and tried to justify 
its claims and pretensions. 

Books on history, especially those on the history of 
one's own country, appeal more to the general reader 
than do tracts on economic policy. The audience of the 
historians is broader than that of the authors of books 
on the balance of payments, foreign exchange control, 
and similar matters. This explains why historians are 
often considered the leading fomenters of the revival 
of the warlike spirit and of the resulting wars of our 
age. Actually they have merely popularized the teach- 
ings of pseudo economists. 

7. History and Judgments of Value 

The subject of history is action and the judgments of 
value directing action toward definite ends. History 
deals with values, but it itself does not value. It looks 
upon events with the eyes of an unaffected observer. 
This is, of course, the characteristic mark of objective 
thought and of the scientific search for truth. Truth 
refers to what is or was, not to a state of affairs that 
is not or was not but that would suit the wishes of the 
truth-seeker better. 

There is no need to add anything to what has been 
said in the first part of this essay about the futility of 
the search for absolute and eternal values. History is 


no better able than any other science to provide stand- 
ards of value that would be more than personal judg- 
ments pronounced then and there by mortal men and 
rejected then and there by other mortal men. 

There are authors who assert that it is logically im- 
possible to deal with historical facts without expressing 
judgments of value. As they see it, one cannot say 
anything relevant about these things without making 
one value judgment after another. If, for example, one 
deals with such phenomena as pressure groups or prosti- 
tution, one has to realize that these phenomena them- 
selves "are, as it were, constituted by value judg- 
ments." x Now, it is true that many people employ 
such terms as "pressure group" and almost every one 
the term "prostitution" in a way that implies a judgment 
of value. But this does not mean that the phenomena to 
which these terms refer are constituted by value judg- 
ments. Prostitution is defined by Geoffrey May as "the 
practice of habitual or intermittent sexual union, more 
or less promiscuous, for mercenary inducement." 2 A 
pressure group is a group aiming to attain legislation 
thought favorable to the interests of the group mem- 
bers. There is no valuation whatever implied in the 
mere use of such terms or in the reference to such 
phenomena. It is not true that history, if it has to avoid 
value judgments, would not be permitted to speak of 
cruelty. 3 The first meaning of the word "cruel" in the 

1. Leo Strauss, Natural Right and History (Chicago, University 
of Chicago Press, 1953), p. 53. 

2. G. May, "Prostitution," Encyclopaedia of the Social Sciences, 
12, 553. 

3. Strauss, p. 52. 


Concise Oxford Dictionary is "indifferent to, delight- 
ing in, another's pain." 4 This definition is no less ob- 
jective and free from any valuation than that given by 
the same dictionary for sadism: "sexual perversion 
marked by love of cruelty." 5 As a psychiatrist employs 
the term "sadism" to describe the condition of a patient, 
a historian may refer to "cruelty" in describing certain 
actions. A dispute that may arise as to what causes 
pain and what not, or as to whether in a concrete case 
pain was inflicted because it gave pleasure to the actor 
or for other reasons, is concerned with establishing 
facts, not making judgments of value. 

The problem of history's neutrality as to judgments 
of value must not be confused with that of the attempts 
to falsify the historical account. There have been his- 
torians who were eager to represent battles lost by 
their own nation's armed forces as victories and who 
claimed for their own people, race, party, or faith every- 
thing they regarded as meritorious and exculpated them 
from everything they regarded as objectionable. The 
textbooks of history prepared for the public schools are 
marked by a rather naive parochialism and chauvinism. 
There is no need to dwell on such futilities. But it must 
be admitted that even for the most conscientious his- 
torian abstention from judgments of value may offer 
certain difficulties. 

As a man and as a citizen the historian takes sides 
in many feuds and controversies of his age. It is not 

4. 3d ed., 1934, p. 273. 

5. Ibid., p. 1042. 


easy to combine scientific aloofness in historical studies 
with partisanship in mundane interests. But that can 
and has been achieved by outstanding historians. The 
historian's world view may color his work. His repre- 
sentation of events may be interlarded with remarks 
that betray his feelings and wishes and divulge his 
party affiliation. However, the postulate of scientific his- 
tory's abstention from value judgments is not infringed 
by occasional remarks expressing the preferences of 
the historian if the general purport of the study is 
not affected. If the writer, speaking of an inept com- 
mander of the forces of his own nation or party, says 
"unfortunately" the general was not equal to his task, 
he has not failed in his duty as a historian. The his- 
torian is free to lament the destruction of the master- 
pieces of Greek art provided his regret does not influ- 
ence his report of the events that brought about this 

The problem of Wertfreiheit must also be clearly dis- 
tinguished from that of the choice of theories resorted 
to for the interpretation of facts. In dealing with the 
data available, the historian needs all the knowledge 
provided by the other disciplines, by logic, mathe- 
matics, praxeology, and the natural sciences. If what 
these disciplines teach is insufficient or if the historian 
chooses an erroneous theory out of several conflicting 
theories held by the specialists, his effort is misled and 
his performance is abortive. It may be that he chose 
an untenable theory because he was biased and this 
theory best suited his party spirit. But the acceptance 


of a faulty doctrine may often be merely the outcome 
of ignorance or of the fact that it enjoys greater popu- 
larity than more correct doctrines. 

The main source of dissent among historians is 
divergence in regard to the teachings of all the other 
branches of knowledge upon which they base their 
presentation. To a historian of earlier days who be- 
lieved in witchcraft, magic, and the devil's interfer- 
ence with human affairs, things had a different aspect 
than they have for an agnostic historian. The neo- 
mercantilist doctrines of the balance of payments and 
of the dollar shortage give an image of present-day 
world conditions very different from that provided by 
an examination of the situation from the point of view 
of modern subjectivist economics. 

Chapter 14. The Epistemohgical 
Features of History 

1. Prediction in the Natural Sciences 

The natural sciences have two modes of predict- 
ing future events: the sweeping prediction and the 
statistical prediction. The former says: h follows a. The 
latter says: In x% of all cases b follows a; in (100-x)% 
of all cases non-fe follows a. 

Neither of these predictions can be called apodictic. 
Both are based upon experience. Experience is neces- 
sarily of past events. It can be resorted to for the pre- 
diction of future events only with the aid of the 
assumption that an invariable uniformity prevails in 
the concatenation and succession of natural phenom- 
ena. Referring to this aprioristic assumption, the natural 
sciences proceed to ampliative induction, inferring from 
regularity observed in the past to the same regularity in 
future events. 

Ampliative induction is the epistemological basis of 
the natural sciences. The fact that the various machines 
and gadgets designed in accordance with the theorems 
of the natural sciences run and work in the expected 
way provides practical confirmation both of the theo- 
rems concerned and of the inductive method. However, 
this corroboration too refers only to the past. It does 
not preclude the possibility that one day factors up to 



now unknown to us may produce effects that will make 
a shambles of our knowledge and technological skill. 
The philosopher has to admit that there is no way 
mortal man can acquire certain knowledge about the 
future. But acting man has no reason to attach any im- 
portance to the logical and epistemological precarious- 
ness of the natural sciences. They provide the only 
mental tool that can be used in the ceaseless struggle 
for life. They have proved their practical worth. As no 
other way to knowledge is open to man, no alternative 
is left to him. If he wants to survive and to render his 
life more agreeable, he must accept the natural sciences 
as guides toward technological and therapeutical suc- 
cess. He must behave as if the predictions of the natural 
sciences were truth, perhaps not eternal, unshakable 
truth, but at least truth for that period of time for which 
human action can plan to provide. 

The assurance with which the natural sciences an- 
nounce their findings is not founded solely upon this 
as if. It is also derived from the intersubjectivity and 
objectivity of the experience that is the raw material 
of the natural sciences and the starting point of their 
reasoning. The apprehension of external objects is such 
that among all those in a position to become aware of 
them agreement about the nature of that apprehension 
can easily be reached. There is no disagreement about 
pointer readings that cannot be brought to a final de- 
cision. Scientists may disagree about theories. They 
never lastingly disagree about the establishment of 
what is called pure facts. There can be no dispute as to 


whether a definite piece of stuff is copper or iron or its 
weight is two pounds or five. 

It would be preposterous to fail to recognize the 
significance of the epistemological discussions concern- 
ing induction, truth, and the mathematical calculus of 
probability. Yet these philosophical disquisitions do not 
further our endeavors to analyze the epistemological 
problems of the sciences of human action. What the 
epistemology of the sciences of human action has to 
remember about the natural sciences is that their theo- 
rems, although abstracted from experience, i.e., from 
what happened in the past, have been used successfully 
for designing future action. 

2. History and Prediction 

In their logical aspect the procedures applied in the 
most elaborate investigations in the field of natural 
events do not differ from the mundane logic of every- 
body's daily business. The logic of science is not differ- 
ent from the logic resorted to by any individual in the 
meditations that precede his actions or weigh their 
effects afterward. There is only one a priori and only 
one logic conceivable to the human mind. There is con- 
sequently only one body of natural science that can 
stand critical examination by the logical analysis of 
available experience. 

As there is only one mode of logical thinking, there 
is only one praxeology (and, for that matter, only one 
mathematics ) valid for all. As there is no human think- 


ing that would fail to distinguish between A and non-A, 
so there is no human action that would not distinguish 
between means and ends. This distinction implies that 
man values, i.e., that he prefers an A to a B. 

For the natural sciences the limit of knowledge is 
the establishment of an ultimate given, that is, of a fact 
that cannot be traced back to another fact of which it 
would appear as the necessary consequence. For the 
sciences of human action the ultimate given is the judg- 
ments of value of the actors and the ideas that engender 
these judgments of value. 

It is precisely this fact that precludes employing the 
methods of the natural sciences to solve problems of 
human action. Observing nature, man discovers an 
inexorable regularity in the reaction of objects to stim- 
uli. He classifies things according to the pattern of their 
reaction. A concrete thing, for example copper, is some- 
thing that reacts in the same way in which other speci- 
mens of the same class react. As the patterns of this 
reaction are known, the engineer knows what future 
reaction on the part of copper he has to expect. This 
foreknowledge, notwithstanding the epistemological 
reservations referred to in the preceding section, is 
considered apodictic. All our science and philosophy, 
all our civilization would at once be called into ques- 
tion if, in but one instance and for but one moment, the 
patterns of these reactions varied. 

What distinguishes the sciences of human action is 
the fact that there is no such foreknowledge of the in- 
dividuals' value judgments, of the ends they will aim 
at under the impact of these value judgments, of the 


means they will resort to in order to attain the ends 
sought and of the effects of their actions insofar as these 
are not entirely determined by factors the knowledge of 
which is conveyed by the natural sciences. We know 
something about these things, but our knowledge of 
them and about them is categorially different from the 
kind of knowledge the experimental natural sciences 
provide about natural events. We could call it histor- 
ical knowledge if this term were not liable to misinter- 
pretation in suggesting that this knowledge serves only 
or predominantly to elucidate past events. Yet its most 
important use is to be seen in the service it renders to 
the anticipation of future conditions and to the design- 
ing of action that necessarily always a.ims at affecting 
future conditions. 

Something happens in the field of the nation's domes- 
tic politics. How will Senator X, the outstanding man 
of the green party, react? Many informed men may 
have an opinion about the senator's expected reaction. 
Perhaps one of these opinions will prove to be correct. 
But it may also happen that none of them was right and 
that the senator reacts in a way not prognosticated by 
anybody. And then a similar dilemma arises in weigh- 
ing the effects brought about by the way the senator 
has reacted. This second dilemma cannot be resolved 
as the first one was, as soon as the senator's action be- 
comes known. For centuries to come historians may dis- 
agree about the effects produced by certain actions. 

Traditional epistemology, exclusively preoccupied 
with the logical problems of the natural sciences and 
wholly ignorant even of the existence of the field of 


praxeology, tried to deal with these problems from the 
point of view of its narrow-minded, dogmatic ortho- 
doxy. It condemned all the sciences that were not ex- 
perimental natural sciences as backward and committed 
to an outdated philosophical and metaphysical, i.e., in 
their usage, stupid, method. It confused probability as 
the term is used in colloquial expressions referring to 
history and practical everyday action with the concept 
of probability as employed in the mathematical calculus 
of probability. Finally sociology made its appearance. 
It promised to substitute true science for the rubbish 
and empty gossiping of the historians in developing an 
aposteriori science of "social laws" to be derived from 
historical experience. 

This disparagement of the methods of history moved 
first Dilthey, then Windelband, Rickert, Max Weber, 
Croce, and Collingwood to opposition. Their interpre- 
tations were in many regards unsatisfactory. They were 
deluded by many of the fundamental errors of histori- 
cism. All but Collingwood failed entirely to recognize 
the unique epistemological character of economics. 
They were vague in their references to psychology. The 
first four moreover were not free from the chauvinistic 
bias which in the age of pan-Germanism induced even 
the most eminent German thinkers to belittle the teach- 
ings of what they called Western philosophy. But the 
fact remains that they succeeded brilliantly in elucidat- 
ing the epistemological features of the study of history. 
They destroyed forever the prestige of those epistemo- 
logical doctrines that blamed history for being history 
and for not being "social physics." They exposed the fu- 


tility of the search after aposteriori laws of historical 
change or historical becoming that would make possible 
the prediction of future history in the way the physicists 
predict the future behavior of copper. They made his- 
tory self-conscious. 

3. The Specific Understanding of History 

Praxeology, the a priori science of human action, 
and, more specifically, its up to now best-developed 
part, economics, provides in its field a consummate in- 
terpretation of past events recorded and a consummate 
anticipation of the effects to be expected from future 
actions of a definite kind. Neither this interpretation 
nor this anticipation tells anything about the actual 
content and quality of the acting individuals' judgments 
of value. Both presuppose that the individuals are valu- 
ing and acting, but their theorems are independent of 
and unaffected by the particular characteristics of this 
valuing and acting. These characteristics are for the 
sciences of human action ultimate data, they are what 
is called historical individuality. 

However, there is a momentous difference between 
the ultimate given in the natural sciences and that in 
the field of human action. An ultimate given of nature 
is — for the time being, that is, until someone succeeds in 
exposing it as the necessary consequence of some other 
ultimate given — a stopping point for human reflection. 
It is as it is, that is all that man can say about it. 

But it is different with the ultimate given of human 
action, with the value judgments of individuals and the 


actions induced by them. They are ultimately given as 
they cannot be traced back to something of which they 
would appear to be the necessary consequence. If this 
were not the case, it would not be permissible to call 
them an ultimate given. But they are not, like the ulti- 
mate given in the natural sciences, a stopping point for 
human reflection. They are the starting point of a spe- 
cific mode of reflection, of the specific understanding of 
the historical sciences of human action. 

If the experimenter in the laboratory has established 
a fact which, at least for the time being, cannot be 
traced back to another fact of which it would appear as 
a derivative, there is nothing more to be said about the 
issue. But if we are faced with a value judgment and 
the resulting action, we may try to understand how 
they originated in the mind of the actor. 

This specific understanding of human action as it 
is practiced by everybody in all his interhuman rela- 
tions and actions is a mental procedure that must not 
be confused with any of the logical schemes resorted 
to by the natural sciences and by everybody in purely 
technological or therapeutical activities. 

The specific understanding aims at the cognition of 
other people's actions. It asks in retrospect: What was 
he doing, what was he aiming at? What did he mean in 
choosing this definite end? What was the outcome of his 
action? Or it asks analogous questions for the future: 
What ends will he choose? What will he do in order to 
attain them? What will the outcome of his action be? 

In actual life all these questions are seldom asked in 
isolation. They are mostly connected with other ques- 


tions referring to praxeology or to the natural sciences. 
The categorial distinctions that epistemology is bound 
to make are tools of our mental operations. The real 
events are complex phenomena and can be grasped 
by the mind only if each of the various tools available 
is employed for its proper purpose. 

The main epistemological problem of the specific 
understanding is: How can a man have any knowledge 
of the future value judgments and actions of other peo- 
ple? The traditional method of dealing with this prob- 
lem, commonly called the problem of the alter ego or 
Fremdverstehen, is unsatisfactory. It focused attention 
upon grasping the meaning of other people's behavior 
in the "present" or, more correctly, in the past. But the 
task with which acting man, that is, everybody, is faced 
in all relations with his fellows does not refer to the 
past; it refers to the future. To know the future reac- 
tions of other people is the first task of acting man. 
Knowledge of their past value judgments and actions, 
although indispensable, is only a means to this end. 

It is obvious that this knowledge which provides a 
man with the ability to anticipate to some degree other 
people's future attitudes is not a priori knowledge. The 
a priori discipline of human action, praxeology, does 
not deal with the actual content of value judgments; 
it deals only with the fact that men value and then act 
according to their valuations. What we know about 
the actual content of judgments of value can be derived 
only from experience. We have experience of other 
people's past value judgments and actions; and we have 
experience of our own value judgments and actions. 


The latter is commonly called introspection. To distin- 
guish it from experimental psychology, the term thy- 
mology was suggested in an earlier chapter * for that 
branch of knowledge which deals with human judg- 
ments of values and ideas. 

Wilhelm Dilthey stressed the role that thymology — 
of course he said psychology — plays in the Geisteswis- 
senschaften, the mental or moral sciences, the sciences 
dealing with human thoughts, ideas, and value judg- 
ments, and their operation in the external world. 2 It is 
not our task to trace back Dilthey 's ideas to earlier au- 
thors. There is little doubt that he owed much to prede- 
cessors, especially to David Hume. But the examination 
of these influences must be left to treatises dealing with 
the history of philosophy. Dilthey's chief contribution 
was his pointing out in what respect the kind of psy- 
chology he was referring to was epistemologically and 
methodologically different from the natural sciences 
and therefore also from experimental psychology. 

4. Thymological Experience 

Thymological experience is what we know about hu- 
man value judgments, the actions determined by them, 
and the responses these actions arouse in other people. 
As has been said, this experience stems either from in- 
trospection or from intercourse with other men, from 
our acting in various interhuman relations. 

1. See p. 265. 

2. See especially Dilthey, Einleitung in die Geistestoissenschaften, 
Leipzig, 1883. See also H. A. Hodges, The Philosophy of Wilhelm 
Dilthey (London, 1952), pp. 170 ff. 


Like all experience, thymological experience too is 
necessarily knowledge of things that happened in the 
past. For reasons made sufficiently clear in the earlier 
sections of this essay, it is not permitted to assign to it 
the meaning the natural sciences assign to the results of 
experimentation. What we learn from thymological ex- 
perience never has the significance of what is called in 
the natural sciences an experimentally established fact. 
It always remains a historical fact. Thymology is a his- 
torical discipline. 

For lack of any better tool, we must take recourse to 
thymology if we want to anticipate other people's fu- 
ture attitudes and actions. Out of our general thymo- 
logical experience, acquired either directly from observ- 
ing our fellow men and transacting business with them 
or indirectly from reading and from hearsay, as well as 
out of our special experience acquired in previous con- 
tacts with the individuals or groups concerned, we try 
to form an opinion about their future conduct. It is 
easy to see in what the fundamental difference consists 
between this kind of anticipation and that of an engi- 
neer designing the plan for the construction of a bridge. 

Thymology tells no more than that man is driven 
by various innate instincts, various passions, and various 
ideas. The anticipating individual tries to set aside those 
factors that manifestly do not play any role in the con- 
crete case under consideration. Then he chooses among 
the remaining ones. 

It is usual to qualify such prognoses as more or less 
probable and to contrast them with the forecasts of 
the natural sciences which once were called certain and 


are still considered certain and exact by people not fa- 
miliar with the problems of logic and epistemology. 
Setting aside these latter problems, we must emphasize 
that the probability of the prognoses concerning future 
human action has little in common with that category 
of probability which is dealt with in the mathematical 
calculus of probability. The former is case probability 
and not class probability. 1 In order to prevent confu- 
sion, it is advisable to refer to case probability as likeli- 

In the specific understanding of future events there 
are as a rule two orders of likelihood to be ascertained. 
The first refers to the enumeration of the factors that 
could possibly take or have taken effect in producing 
the outcome in question. The second refers to the influ- 
ence of each of these factors in the production of the 
outcome. It can easily be seen that the likelihood that 
the enumeration of the operating factors will be correct 
and complete is much higher than the likelihood that 
the proper extent of participation will be attributed to 
each. Yet the correctness or incorrectness of a prognosis 
depends on the correctness or incorrectness of this lat- 
ter evaluation. The precariousness of forecasting is 
mainly due to the intricacy of this second problem. It is 
not only a rather puzzling question in forecasting future 
events. It is no less puzzling in retrospect for the his- 

It is not enough for the statesman, the politician, the 
general, or the entrepreneur to know all the factors that 
can possibly contribute to the determination of a future 

1. See above, p. 91. 


event. In order to anticipate correctly they must also 
anticipate correctly the quantity as it were of each 
factor's contribution and the instant at which its contri- 
bution will become effective. And later the historians 
will have to face the same difficulty in analyzing and 
understanding the case in retrospect. 

5. Real Types and Ideal Types 

The natural sciences classify the things of the external 
world according to their reaction to stimuli. Since cop- 
per is something that reacts in a definite way, the name 
copper is denied to a thing that reacts in a different 
way. In establishing the fact that a thing is copper, 
we make a forecast about its future behavior. What is 
copper cannot be iron or oxygen. 

In acting — in their daily routine, as well as in tech- 
nology and therapeutics, and also in history — people 
employ "real types," that is, class concepts distinguish- 
ing people or institutions according to neatly definable 
traits. Such classification can be based on concepts of 
praxeology and economics, of jurisprudence, of tech- 
nology, and of the natural sciences. It may refer to 
Italians, for example, either as the inhabitants of a defi- 
nite area, or as people endowed with a special legal 
characteristic, viz., Italian nationality, or as a definite 
linguistic group. This kind of classification is independ- 
ent of specific understanding. It points toward some- 
thing that is common to all members of the class. All 
Italians in the geographic sense of the term are affected 
by geological or meteorological events that touch their 


country. All Italian citizens are concerned by legal acts 
relating to people of their nationality. All Italians in 
the linguistic sense of the term are in a position to make 
themselves understood to one another. Nothing more 
than this is meant when a man is called an Italian in one 
of these three connotations. 

The characteristic mark of an "ideal type," on the 
other hand, is that it implies some proposition concern- 
ing valuing and acting. If an ideal type refers to peo- 
ple, it implies that in some respect these men are valu- 
ing and acting in a uniform or similar way. When it re- 
fers to institutions, it implies that these institutions are 
products of uniform or similar ways of valuing and act- 
ing or that they influence valuing and acting in a uni- 
form or similar way. 

Ideal types are constructed and employed on the 
basis of a definite mode of understanding the course of 
events, whether in order to forecast the future or to 
analyze the past. If in dealing with American elections 
one refers to the Italian vote, the implication is that 
there are voters of Italian descent whose voting is to 
some extent influenced by their Italian origin. That 
such a group of voters exists will hardly be denied; but 
people disagree widely as to the number of citizens in- 
cluded in this group and the degree to which their vot- 
ing is determined by their Italian ideologies. It is this 
uncertainty about the power of the ideology concerned, 
this impossibility of finding out and measuring its effect 
upon the minds of the individual members of the group, 
that characterizes the ideal type as such and distin- 
guishes it from real types. An ideal type is a conceptual 


tool of understanding and the service that it renders 
depends entirely on the serviceableness of the definite 
mode of understanding. 

Ideal types must not be confused with the types 
referred to in moral or political "oughts," which we may 
call "ought types." The Marxians contend that all prole- 
tarians necessarily behave in a definite way, and the 
Nazis make the analogous statement with regard to all 
Germans. But neither of these parties can deny that its 
declaration is untenable as a proposition about what is, 
since there are proletarians and Germans who deviate 
from the modes of acting which these parties call prole- 
tarian and German respectively. What they really have 
in mind in announcing their dicta is a moral obligation. 
What they mean is: Every proletarian ought to act the 
way the party program and its legitimate expositors 
declare to be proletarian; every German ought to act 
the way the nationalist party considers genuinely Ger- 
man. Those proletarians or Germans whose conduct 
does not comply with the rules are smeared as traitors. 
The ought type belongs to the terminology of ethics and 
politics and not to that of the epistemology of the sci- 
ences of human action. 

It is furthermore necessary to separate ideal types 
from organizations having the same name. In dealing 
with nineteenth-century French history we frequently 
encounter references to the Jesuits and to the Free 
Masons. These terms may refer to acts of the organiza- 
tions designated by these names, e.g., "The Jesuit order 
opened a new school" or 'The lodges of the Free 
Masons donated a sum of money for the relief of pec- 


pie who suffered in a fire." Or they may refer to ideal 
types, pointing out that members of these organizations 
and their friends are in definite respects acting under 
the sway of a definite Jesuit or Masonic ideology. There 
is a difference between stating that a political move- 
ment is organized, guided, and financed by the order 
or the lodges as such and saying that it is inspired by 
an ideology of which the order or the lodges are con- 
sidered the typical or outstanding representatives. The 
first proposition has no reference to the specific under- 
standing. It concerns facts that could be confirmed or 
disproved by the study of records and the hearing of 
witnesses. The second assertion regards understanding. 
In order to form a judgment on its adequacy or inade- 
quacy one has to analyze ideas and doctrines and their 
bearing upon actions and events. Methodologically 
there is a fundamental difference between the analysis 
of the impact of the ideology of Marxian socialism upon 
the mentality and the conduct of our contemporaries 
and the study of the actions of the various communist 
and socialist governments, parties, and conspiracies. 1 

1. There is a distinction between the Communist party or a Com- 
munist party as an organized body on the one hand and the com- 
munist ( Marxian ) ideology on the other. In dealing with contemporary 
history and politics people often fail to realize the fact that many 
people who are not members — "card-bearing" or dues-paying members 
— of a party organization may be, either totally or in certain regards, 
under the sway of the party ideology. Especially in weighing the 
strength of the ideas of communism or of those of Nazism in Germany 
or of Fascism in Italy serious confusion resulted from this error. 
Furthermore it is necessary to know that an ideology may sometimes 
also influence the minds of those who believe that they are entirely 
untouched by it or who even consider themselves its deadly foes and 
are fighting it passionately. The success of Nazism in Germany in 1933 


The service a definite ideal type renders to the acting 
man in his endeavors to anticipate future events and to 
the historian in his analysis of the past is dependent on 
the specific understanding that led to its construction. 
To question the usefulness of an ideal type for explain- 
ing a definite problem, one must criticize the mode of 
understanding involved. 

In dealing with conditions in Latin America the ideal 
type "general" may be of some use. There have been 
definite ideologies current which in some respects deter- 
mined the role played by many — not by all — army 
leaders who became important in politics. In France too 
ideas prevailed that by and large circumscribed the 
position of generals in politics and the role of such men 
as Cavaignac, MacMahon, Boulanger, Petain, and de 
Gaulle. But in the United States it would make no sense 
to employ the ideal type of a political general or a gen- 
eral in politics. No American ideology exists that would 
consider the armed forces as a separate entity distin- 
guished from and opposed to the "civilian" population. 
There is consequently no political esprit de corps in 
the army and its leaders have no authoritarian prestige 
among "civilians." A general who becomes president 
ceases not only legally but also politically to be a mem- 
ber of the army. 

was due to the fact that the immense majority of the Germans, even 
of those voting the ticket of the Marxist parties, of the Catholic 
Centrum party, and of the various "bourgeois" splinter parties, were 
committed to the ideas of radical aggressive nationalism, while the 
Nazis themselves had adopted the basic principles of the socialist 
program. Great Britain would not have gone socialist if the Conserva- 
tives, not to speak of the "Liberals," had not virtually endorsed 
socialist ideas. 


In referring to ideal types the historian of the past as 
well as the historian of the future, i.e., acting man, must 
never forget that there is a fundamental difference 
between the reactions of the objects of the natural 
sciences and those of men. It is this difference that peo- 
ple have wanted to bring into relief in speaking of the 
opposition of mind and matter, of freedom of the will, 
and of individuality. Ideal types are expedients to sim- 
plify the treatment of the puzzling multiplicity and 
variety of human affairs. In employing them one must 
always be aware of the deficiencies of any kind of sim- 
plification. The exuberance and variability of human 
life and action cannot be fully seized by concepts and 
definitions. Some unanswered or even unanswerable 
questions always remain, some problems whose solution 
passes the ability even of the greatest minds. 


Chapter 15. Philosophical Interpretations of History 

1. Philosophies of History and Philosophical 
Interpretations of History 

The attempts to provide a philosophical interpreta- 
tion of history must not be confused with any of the 
various schemes of philosophy of history. They do not 
aim at the discovery of the end toward which the proc- 
ess of human history is tending. They try to bring into 
relief factors that play a momentous part in determin- 
ing the course of historical events. They deal with the 
ends individuals and groups of individuals are aiming 
at, but they abstain from any opinion about the end 
and the meaning of the historical process as a whole 
or about a preordained destiny of mankind. They rely 
not upon intuition but upon a study of history. They 
try to demonstrate the correctness of their interpreta- 
tion by referring to historical facts. In this sense they 
can be called discursive and scientific. 

It is useless to enter into a discussion about the merits 
and demerits of a definite brand of philosophy of his- 
tory. A philosophy of history has to be accepted as a 
whole or rejected as a whole. No logical arguments and 
no reference to facts can be advanced either for or 
against a philosophy of history. There is no question of 
reasoning about it; what matters is solely belief or dis- 
belief. It is possible that in a few years the entire earth 



will be subject to socialism. If this occurs, it will by no 
means confirm the Marxian variety of philosophy of 
history. Socialism will not be the outcome of a law op- 
erating "independently of the will of men" with "the 
inexorability of a law of nature." It will be precisely 
the outcome of the ideas that got into the heads of men, 
of the conviction shared by the majority that socialism 
will be more beneficial to them than capitalism. 

A philosophical interpretation of history can be mis- 
used for political propaganda. However, it is easy to 
separate the scientific core of the doctrine from its 
political adaptation and modification. 

2. Environtnentalism 

Environmentalism is the doctrine that explains histor- 
ical changes as produced by the environment in which 
people are living. There are two varieties of this doc- 
trine: the doctrine of physical or geographical environ- 
mentalism and the doctrine of social or cultural envi- 

The former doctrine asserts that the essential features 
of a people's civilization are brought about by geo- 
graphical factors. The physical, geological, and cli- 
matic conditions and the flora and fauna of a region 
determine the thoughts and the actions of its inhabit- 
ants. In the most radical formulation of their thesis, 
anthropogeographical authors are eager to trace back 
all differences between races, nations, and civilizations 
to the operation of man's natural environment. 

The inherent misconception of this interpretation is 


that it looks upon geography as an active and upon 
human action as a passive factor. However, the geo- 
graphical environment is only one of the components 
of the situation in which man is placed by his birth, 
that makes him feel uneasy and causes him to employ 
his reason and his bodily forces to get rid of this un- 
easiness as best he may. Geography (nature) provides 
on the one hand a provocation to act and on the 
other hand both means that can be utilized in acting 
and insurmountable limits imposed upon the human 
striving for betterment. It provides a stimulus but not 
the response. Geography se"ts a task, but man has to 
solve it. Man lives in a definite geographical environ- 
ment and is forced to adjust his action to the conditions 
of this environment. But the way in which he adjusts 
himself, the methods of his social, technological, and 
moral adaptation, are not determined by the external 
physical factors. The North American continent pro- 
duced neither the civilization of the Indian aborigines 
nor that of the Americans of European extraction. 

Human action is conscious reaction to the stimulus 
offered by the conditions under which man lives. As 
some of the components of the situation in which he 
lives and is called upon to act vary in different parts of 
the globe, there are also geographical differences in 
civilization. The wooden shoes of the Dutch fishermen 
would not be useful to the mountaineers of Switzerland. 
Fur coats are practical in Canada but less so in Tahiti. 

The doctrine of social and cultural environmentalism 
merely stresses the fact that there is — necessarily — 
continuity in human civilization. The rising generation 


does not create a new civilization from the grass roots. 
It enters into the social and cultural milieu that the pre- 
ceding generations have created. The individual is born 
at a definite date in history into a definite situation 
determined by geography, history, social institutions, 
mores, and ideologies. He has daily to face the altera- 
tion in the structure of this traditional surrounding 
effected by the actions of his contemporaries. He does 
not simply live in the world. He lives in a circumscribed 
spot. He is both furthered and hampered in his acting 
by all that is peculiar to this spot. But he is not deter- 
mined by it. 

The truth contained in environmentalism is the cog- 
nition that every individual lives at a definite epoch in 
a definite geographical space and acts under the condi- 
tions determined by this environment. The environment 
determines the situation but not the response. To the 
same situation different modes of reacting are thinkable 
and feasible. Which one the actors choose depends on 
their individuality. 

3. The Egalitarians' Interpretation of History 

Most biologists maintain that there is but one species 
of man. The fact that all people can interbreed and 
produce fertile offspring is taken as evidence of the 
zoological unity of mankind. Yet within the species 
Homo sapiens there are numerous variations which 
make it imperative to distinguish subspecies or races. 

There are considerable bodily differences between 


the members of various races; there are also remarkable 
although less momentous differences between members 
of the same race, subrace, tribe, or family, even between 
brothers and sisters, even between nonidentical twins. 
Every individual is already at birth different bodily 
from all other specimens, is characterized by individual 
traits of his own. But no matter how great these dif- 
ferences may be, they do not affect the logical structure 
of the human mind. There is not the slightest evidence 
for the thesis developed by various schools of thought 
that the logic and thinking of different races are cate- 
gorially different. 

The scientific treatment of the inborn differences 
between individuals and of their biological and physi- 
ological inheritance has been grossly muddled and 
twisted by political prepossessions. Behavioristic psy- 
chology maintains that all differences in mental traits 
among men are caused by environmental factors. It 
denies all influence of bodily build upon mental activ- 
ities. It holds that equalizing the outer conditions of 
human life and education could wipe out all cultural 
differences between individuals, whatever their racial 
or family affiliation might be. Observation contradicts 
these assertions. It shows that there is a degree of corre- 
lation between bodily structure and mental traits. An 
individual inherits from his parents and indirectly from 
his parents' ancestors not only the specific biological 
characteristics of his body but also a constitution of 
mental powers that circumscribes the potentialities of 
his mental achievements and his personality. Some peo- 


pie are endowed with an innate ability for definite kinds 
of activities while others lack this gift entirely or possess 
it only to a lesser degree. 

The behavioristic doctrine was used to support the 
program of socialism of the egalitarian variety. Egali- 
tarian socialism attacks the classical liberal principle of 
equality before the law. In its opinion the inequalities 
of income and wealth existing in the market economy 
are in their origin and their social significance not dif- 
ferent from those existing in a status society. They are 
the outcome of usurpations and expropriations and the 
resulting exploitation of the masses brought about by 
arbitrary violence. The beneficiaries of this violence 
form a dominating class as the instrument of which the 
state forcibly holds down the exploited. What distin- 
guishes the "capitalist" from the "common man" is the 
fact that he has joined the gang of the unscrupulous ex- 
ploiters. The only quality required in an entrepreneur 
is villainy. His business, says Lenin, is accounting and 
the control of production and distribution, and these 
things have been "simplified by capitalism to the ut- 
most till they have become the extraordinarily simple 
operations of watching, recording and issuing receipts, 
within the reach of anybody who can read and write 
and knows the first four rules of arithmetic." 1 Thus the 
"property privileges" of the "capitalists" are no less 
superfluous and therefore parasitic than the status privi- 
leges of the aristocratic landowners were on the eve of 
the Industrial Revolution. In establishing a spurious 

1. Lenin, State and Revolution (New York, International Publishers, 
1932), pp. 83 f. 


equality before the law and preserving the most iniqui- 
tous of all privileges, private property, the bourgeoisie 
has duped the unsuspecting people and robbed them 
of the fruits of the revolution. 

This doctrine, already dimly present in the writings 
of some earlier authors and popularized by Jean Jacques 
Rousseau and by Babeuf, was transformed in the Marx- 
ian class-struggle doctrine into an interpretation of the 
whole process of human history from the point of view 
of usurpation. In the context of the Marxian philosophy 
of history the emergence of status and class distinctions 
was a necessary and historically inevitable result of the 
evolution of the material productive forces. The mem- 
bers of the dominating castes and classes were not indi- 
vidually responsible for the acts of oppression and ex- 
ploitation. They were not morally inferior to those they 
held in subservience. They were simply the men in- 
scrutable destiny singled out to perform a socially, 
economically, and historically necessary task. As the 
state of the material productive forces determined each 
individual's role in the consummation of the historical 
process, it was their part to carry out all they accom- 

But quite a different description of the march of hu- 
man affairs is provided by those writings in which Marx 
and Engels deal with historical problems or with po- 
litical issues of their own time. There they unreservedly 
espouse the popular doctrine of the inherent moral cor- 
ruption of the "exploiters." Human history appears as a 
process of progressive moral corruption that started 
when the blissful conditions of primeval village com- 


munities were disrupted by the greed of selfish individ- 
uals. Private ownership of land is the original sin which 
step by step brought about all the disasters that have 
plagued mankind. What elevates an "exploiter" above 
the level of his fellow men is merely villainy. In the 
three volumes of Das Kapital unscrupulousness is the 
only quality alluded to as required in an "exploiter." 
The improvement of technology and the accumulation 
of wealth that Marx considered prerequisite for the 
realization of socialism are described as a result of the 
spontaneous evolution of the mythical material pro- 
ductive forces. The "capitalists" do not get any credit 
for these achievements. All that these villains do is to 
expropriate those who should by rights have the fruits 
of the operation of the material productive forces. They 
appropriate to themselves "surplus value." They are 
merely parasites, and mankind can do without them. 

This interpretation of history from the egalitarian 
point of view is the official philosophy of our age. It 
assumes that an automatic process of historical evolu- 
tion tends to improve technological methods of produc- 
tion, to accumulate wealth, and to provide the means 
for improving the standard of living of the masses. 
Looking back upon conditions in the capitalistic West 
as they developed in the last century or two, statisti- 
cians see a trend of rising productivity and blithely 
surmise that this trend will continue, whatever soci- 
ety's economic organization may be. As they see it, 
a trend of historical evolution is something above the 
level of the actions of men, a "scientifically" established 


fact which cannot be affected by men and by the social 
system. Hence no harm can result from institutions — 
such as the contemporary tax legislation — which aim 
at ultimately wiping out the inequalities of income and 

The egalitarian doctrine is manifestly contrary to all 
the facts established by biology and by history. Only 
fanatical partisans of this theory can contend that what 
distinguishes the genius from the dullard is entirely 
the effect of postnatal influences. The presumption that 
civilization, progress, and improvement emanate from 
the operation of some mythical factor — in the Marxian 
philosophy, the material productive forces — shaping 
the minds of men in such a way that certain ideas are 
successively produced contemporaneously in them, is 
an absurd fable. 

There has been a lot of empty talk about the non- 
existence of differences among men. But there has never 
been an attempt to organize society according to the 
egalitarian principle. The author of an egalitarian tract 
and the leader of an egalitarian party by their very 
activity contradict the principle to which they pay lip 
service. The historical role played by the egalitarian 
creed was to disguise the most abject forms of despotic 
oppression. In Soviet Russia egalitarianism is pro- 
claimed as one of the main dogmas of the official creed. 
But Lenin was deified after his death, and Stalin was 
worshiped in life as no ruler has been since the days of 
the declining Roman Empire. 

The egalitarian fables do not explain the course of 


past history, they are out of place in an analysis of 
economic problems, and useless in planning future 
political action. 

4. The Racial Interpretation of History 

It is a historical fact that the civilizations developed 
by various races are different. In earlier ages it was 
possible to establish this truth without attempting to 
distinguish between higher and lower civilizations. 
Each race, one could contend, develops a culture that 
conforms to its wishes, wants, and ideals. The character 
of a race finds its adequate expression in its achieve- 
ments. A race may imitate accomplishments and insti- 
tutions developed by other races, but it does not long to 
abandon its own cultural pattern entirely and to substi- 
tute an imported alien system for it. If about two thou- 
sand years ago the Greco-Romans and the Chinese had 
learned about each other's civilizations, neither race 
would have admitted the superiority of the other's civi- 

But it is different in our age. The non-Caucasians may 
hate and despise the white man, they may plot his de- 
struction and take pleasure in extravagant praise of 
their own civilizations. But they yearn for the tangible 
achievements of the West, for its science, technology, 
therapeutics, its methods of administration and of in- 
dustrial management. Many of their spokesmen declare 
that they want only to imitate the material culture of 
the West, and to do even that only so far as it does not 
conflict with their indigenous ideologies or jeopardize 


their religious beliefs and observances. They fail to see 
that the adoption of what they disparagingly call the 
merely material achievements of the West is incom- 
patible with preserving their traditional rites and taboos 
and their customary style of life. They indulge in the 
illusion that their peoples could borrow the technology 
of the West and attain a higher material standard of 
living without having first in a Kulturkampf divested 
themselves of the world view and the mores handed 
down from their ancestors. They are confirmed in this 
error by the socialist doctrine, which also fails to rec- 
ognize that the material and technological achieve- 
ments of the West were brought about by the philoso- 
phies of rationalism, individualism, and utilitarianism 
and are bound to disappear if the collectivist and total- 
itarian tenets substitute socialism for capitalism. 

Whatever people may say about Western civilization, 
the fact remains that all peoples look with envy upon its 
achievements, want to reproduce them, and thereby 
implicitly admit its superiority. It is this state of affairs 
that has generated the modern doctrine of race differ- 
ences and its political offshoot, racism. 

The doctrine of race differences maintains that some 
races have succeeded better than others in the pursuit 
of those aims that are common to all men. All men want 
to resist the operation of the factors detrimental to the 
preservation of their lives, their health, and their well- 
being. It cannot be denied that modern Western capi- 
talism has succeeded best in these endeavors. It has 
increased the average length of life and raised the av- 
erage standard of living unprecedentedly. It has made 


accessible to the common man those higher human ac- 
complishments — philosophy, science, art — which in the 
past were everywhere, and today outside the countries 
of Western capitalism still are, accessible only to a small 
minority. Grumblers may blame Western civilization 
for its materialism and may assert that it gratified no- 
body but a small class of rugged exploiters. But their 
laments cannot wipe out the facts. Millions of mothers 
have been made happier by the drop in infant mortality. 
Famines have disappeared and epidemics have been 
curbed. The average man lives in more satisfactory con- 
ditions than his ancestors or his fellows in the noncapi- 
talistic countries. And one must not dismiss as merely 
materialistic a civilization which makes it possible for 
practically everybody to enjoy a Beethoven symphony 
performed by an orchestra conducted by an eminent 

The thesis that some races have been more successful 
than others in their efforts to develop a civilization is 
unassailable as a statement about historical experience. 
As a resume of what has happened in the past it is quite 
correct to assert that modern civilization is the white 
man's achievement. However, the establishment of this 
fact justifies neither the white man's racial self-conceit 
nor the political doctrines of racism. 

Many people take pride in the fact that their ances- 
tors or their relatives have performed great things. It 
gives some men a special satisfaction to know that they 
belong to a family, clan, nation, or race that has dis- 
tinguished itself in the past. But this innocuous vanity 
easily turns into scorn of those who do not belong to 


the same distinguished group and into attempts to 
humiliate and to insult them. The diplomats, soldiers, 
bureaucrats, and businessmen of the Western nations 
who in their contacts with the colored races have dis- 
played overbearing effrontery had no claim at all to 
boast of the deeds of Western civilization. They were 
not the makers of this culture which they compromised 
by their behavior. Their insolence which found its ex- 
pression in such signs as "Entrance forbidden to dogs 
and natives" has poisoned the relations between the 
races for ages to come. But we do not have to deal with 
these sad facts in an analysis of racial doctrines. 

Historical experience warrants the statement that in 
the past the efforts of some subdivisions of the Cauca- 
sian race to develop a civilization have eclipsed those 
of the members of other races. It does not warrant any 
statement about the future. It does not permit us to as- 
sume that this superiority of the white stock will persist 
in the future. Nothing can be predicted from historical 
experience with a likelihood that can be compared with 
the probability of predictions made in the natural sci- 
ences on the basis of facts established by laboratory 
experiments. In 1760 a historian would have been right 
in declaring that Western civilization was mainly an 
achievement of the Latins and the British and that the 
Germans had contributed little to it. It was permissible 
at that time to maintain that German science, art, litera- 
ture, philosophy, and technology were insignificant 
compared to the accomplishments of the members of 
some other nations. One could fairly contend that those 
Germans who had distinguished themselves in these 


fields — foremost among them the astronomers Coper- 
nicus 1 and Kepler and the philosopher Leibniz — could 
succeed only because they had fully absorbed what 
non-Germans had contributed, that intellectually they 
did not belong to Germany, that for a long time they 
had no German followers, and that those who first appre- 
ciated their doctrines were predominantly non-German. 
But if somebody had inferred from these facts that the 
Germans are culturally inferior and would rank in the 
future far below the French and the British, his conclu- 
sion would have been disproved by the course of later 

A prediction about the future behavior of those races 
which today are considered culturally backward could 
only be made by biological science. If biology were to 
discover some anatomical characteristics of the mem- 
bers of the non-Caucasian races which necessarily curb 
their mental faculties, one could venture such a predic- 
tion. But so far biology has not discovered any such 

It is not the task of this essay to deal with the bio- 
logical issues of the racial doctrine. It must therefore 
abstain from analysis of the controversial problems of 
racial purity and miscegenation. Nor is it our task to 
investigate the merits of the political program of racism. 
This is for praxeology and economics. 

All that can be said about racial issues on the ground 
of historical experience boils down to two statements. 
First, the prevailing differences between the various 

1. We need not go into the question whether Copernicus was a 
German or a Pole. See Mises, Omnipotent Government, p. 15. 


biological strains of men are reflected in the civiliza- 
tory achievements of the group members. Second, in 
our age the main achievements in civilization of some 
subdivisions of the white Caucasian race are viewed by 
the immense majority of the members of all other races 
as more desirable than characteristic features of the 
civilization produced by the members of their respec- 
tive own races. 

5. The Secularism of Western Civilization 

An almost universally accepted interpretation of 
modern civilization distinguishes between the spiritual 
and material aspects. The distinction is suspect, as it 
originated not from a dispassionate observation of facts 
but from resentment. Every race, nation, or linguistic 
group boasts of its members' achievements in spiritual 
matters even while admitting its backwardness in ma- 
terial matters. It is assumed that there is little connec- 
tion between the two aspects of civilization, that the 
spiritual is more sublime, deserving, and praiseworthy 
than the "merely" material, and that preoccupation 
with material improvement prevents a people from be- 
stowing sufficient attention on spiritual matters. 

Such were in the nineteenth century the ideas of the 
leaders of the Eastern peoples who were eager to re- 
produce in their own countries the achievements of the 
West. The study of Western civilization made them 
subconsciously despise the institutions and ideologies of 
their native countries and left them feeling inferior. 
They re-established their mental equilibrium by means 


of the doctrine that depreciated Western civilization as 
merely materialistic. The Rumanians or Turks who 
longed for railroads and factories to be built by West- 
ern capital consoled themselves by exalting the spir- 
itual culture of their own nations. The Hindus and the 
Chinese were of course on firmer ground when referring 
to the literature and art of their ancestors. But it seems 
not to have occurred to them that many hundreds of 
years separated them from the generations that had 
excelled in philosophy and poetry, and that in the age 
of these famous ancestors their nations were, if not 
ahead of, certainly not second in material civilization to 
any of their contemporaries. 

In recent decades the doctrine that belittles modern 
Western civilization as merely materialistic has been 
almost universally endorsed by the nations which 
brought about this civilization. It comforts Europeans 
when they compare the economic prosperity of the 
United States with present-day conditions in their own 
countries. It serves the American socialists as a leading 
argument in their endeavor to depict American capital- 
ism as a curse of mankind. Reluctantly forced to admit 
that capitalism pours a horn of plenty upon people and 
that the Marxian prediction of the masses' progressive 
impoverishment has been spectacularly disproved by 
the facts, they try to salvage their detraction of capital- 
ism by describing contemporary civilization as merely 
materialistic and sham. 

Bitter attacks upon modern civilization are launched 
by writers who think that they are pleading the cause 
of religion. They reprimand our age for its secularism. 


They bemoan the passing of a way of life in which, they 
would have us believe, people were not preoccupied 
with the pursuit of earthly ambitions but were first of 
all concerned about the strict observance of their reli- 
gious duties. They ascribe all evils to the spread of 
skepticism and agnosticism and passionately advocate a 
return to the orthodoxy of ages gone by. 

It is hard to find a doctrine which distorts history 
more radically than this antisecularism. There have al- 
ways been devout men, pure in heart and dedicated to 
a pious life. But the religiousness of these sincere be- 
lievers had nothing in common with the established 
system of devotion. It is a myth that the political and 
social institutions of the ages preceding modern individ- 
ualistic philosophy and modem capitalism were imbued 
with a genuine Christian spirit. The teachings of the 
Gospels did not determine the official attitude of the 
governments toward religion. It was, on the contrary, 
this-worldly concerns of the secular rulers — absolute 
kings and aristocratic oligarchies, but occasionally also 
revolting peasants and urban mobs — that transformed 
religion into an instrument of profane political ambi- 

Nothing could be less compatible with true religion 
than the ruthless persecution of dissenters and the hor- 
rors of religious crusades and wars. No historian ever 
denied that very little of the spirit of Christ was to be 
found in the churches of the sixteenth century which 
were criticized by the theologians of the Reformation 
and in those of the eighteenth century which the phi- 
losophers of the Enlightenment attacked. 


The ideology of individualism and utilitarianism 
which inaugurated modern capitalism brought freedom 
also to the religious longings of man. It shattered the 
pretension of those in power to impose their own creed 
upon their subjects. Religion is no longer the observ- 
ance of articles enforced by constables and execution- 
ers. It is what a man, guided by his conscience, spon- 
taneously espouses as his own faith. Modern Western 
civilization is this-worldly. But it was precisely its 
secularism, its religious indifference, that gave rein to 
the renascence of genuine religious feeling. Those who 
worship today in a free country are not driven by the 
secular arm but by their conscience. In complying with 
the precepts of their persuasion, they are not intent 
upon avoiding punishment on the part of the earthly 
authorities but upon salvation and peace of mind. 

6. The Rejection of Capitalism by Antisecularism 

The hostility displayed by the champions of anti- 
secularism to modern ways of life manifests itself in 
the condemnation of capitalism as an unjust system. 

In the opinion of the socialists as well as of the inter- 
ventionists the market economy impedes the full utiliza- 
tion of the achievements of technology and thus checks 
the evolution of production and restricts the quantity 
of goods produced and available for consumption. In 
earlier days these critics of capitalism did not deny 
that an equal distribution of the social product among 
all would hardly bring about a noticeable improvement 
in the material conditions of the immense majority of 


people. In their plans equal distribution played a sub- 
ordinate role. Prosperity and abundance for all which 
they promised was, as they thought, to be expected 
from the freeing of the productive forces from the fet- 
ters allegedly imposed upon them by the selfishness of 
the capitalists. The purpose of the reforms they sug- 
gested was to replace capitalism by a more efficient 
system of production and thereby to inaugurate an age 
of riches for all. 

Now that economic analysis has exposed the illusions 
and fallacies in the socialists' and interventionists' con- 
demnation of capitalism, they try to salvage their pro- 
grams by resorting to another method. The Marxians 
have developed the doctrine of the inevitability of so- 
cialism, and the interventionists, following in their wake, 
speak of the irreversibility of the trend toward more 
and more government interference with economic af- 
fairs. It is obvious that these makeshifts are designed 
merely to cover their intellectual defeat and to divert 
the public's attention from the disastrous consequences 
of the socialist and interventionist policies. 

Similar motives prompt those who advocate socialism 
and interventionism for moral and religious reasons. 
They consider it supererogatory to examine the eco- 
nomic problems involved, and they try to shift the 
discussion of the pros and cons of the market economy 
from the field of economic analysis to what they call 
a higher sphere. They reject capitalism as an unfair 
system and advocate either socialism or interventionism 
as being in accord with their moral or religious princi- 
ples. It is vile, they say, to look upon human affairs 


from the point of view of productivity, profits and a 
materialistic concern about wealth and a plentiful sup- 
ply of material goods. Man ought to strive after justice, 
not wealth. 

This mode of argumentation would be consistent if 
it were openly to ascribe inherent moral value to pov- 
erty and to condemn altogether any effort to raise the 
standard of living above the level of mere subsistence. 
Science could not object to such a judgment of value, 
since judgments of value are ultimate choices on the 
part of the individual who utters them. 

However, those rejecting capitalism from a moral 
and religious point of view do not prefer penury to 
well-being. On the contrary, they tell their flock they 
want to improve man's material well-being. They see it 
as capitalism's chief weakness that it does not provide 
the masses with that degree of well-being which, as 
they believe, socialism or interventionism could provide. 
Their condemnation of capitalism and their recommen- 
dation of social reforms imply the thesis that socialism 
or interventionism will raise, not lower, the standard of 
living of the common man. Thus these critics of capi- 
talism endorse altogether the teachings of the socialists 
and interventionists without bothering to scrutinize 
what the economists have brought forward to discredit 
them. The only fault they find with the tenets of the 
Marxian socialists and the secular parties of interven- 
tionism is their commitment to atheism or secularism. 

It is obvious that the question whether material well- 
being is best served by capitalism, socialism, or inter- 


ventionism can be decided only by careful analysis of 
the operation of each of these systems. This is what 
economics is accomplishing. There is no point in deal- 
ing with these issues without taking full account of all 
that economics has to say about them. 

It is justifiable if ethics and religion tell people that 
they ought to make better use of the well-being that 
capitalism brings them; if they try to induce the faith- 
ful to substitute better ways of spending for the objec- 
tionable habits of feasting, drinking, and gambling; if 
they condemn lying and cheating and praise the moral 
values implied in purity of family relations and in 
charity to those in need. But it is irresponsible to con- 
demn one social system and to recommend its replace- 
ment by another system without having fully investi- 
gated the economic consequences of each. 

There is nothing in any ethical doctrine or in the 
teachings of any of the creeds based on the Ten Com- 
mandments that could justify the condemnation of an 
economic system which has multiplied the population 
and provides the masses in the capitalistic countries 
with the highest standard of living ever attained in his- 
tory. From the religious point of view, too, the drop in 
infant mortality, the prolongation of the average length 
of life, the successful fight against plagues and disease, 
the disappearance of famines, illiteracy, and supersti- 
tion tell in favor of capitalism. The churches are right 
to lament the destitution of the masses in the economi- 
cally backward countries. But they are badly mistaken 
when they assume that anything can wipe out the 


poverty of these wretched people but unconditional 
adoption of the system of profit-seeking big business, 
that is, mass production for the satisfaction of the needs 
of the many. 

A conscientious moralist or churchman would not 
consider meddling in controversies concerning tech- 
nological or therapeutical methods without having suf- 
ficiently familiarized himself with all the physical, 
chemical and physiological problems involved. Yet 
many of them think that ignorance of economics is no 
bar to handling economic issues. They even take pride 
in their ignorance. They hold that problems of the eco- 
nomic organization of society are to be considered ex- 
clusively from the point of view of a preconceived idea 
of justice and without taking account of what they call 
the shabby materialistic concern for a comfortable life. 
They recommend some policies, reject others, and do 
not bother about the effects that must result from the 
adoption of their suggestions. 

This neglect of the effects of policies, whether re- 
jected or recommended, is absurd. For the moralists 
and the Christian proponents of anticapitalism do not 
concern themselves with the economic organization of 
society from sheer caprice. They seek reform of existing 
conditions because they want to bring about definite 
effects. What they call the injustice of capitalism is 
the alleged fact that it causes widespread poverty and 
destitution. They advocate reforms which, as they ex- 
pect, will wipe out poverty and destitution. They are 
therefore, from the point of view of their own valua- 
tions and the ends they themselves are eager to attain, 


inconsistent in referring merely to something which 
they call the higher standard of justice and morality 
and ignoring the economic analysis of both capitalism 
and the anticapitalistic policies. Their terming capital- 
ism unjust and anticapitalistic measures just is quite 
arbitrary since it has no relation to the effect of each 
of these sets of economic policies. 

The truth is that those fighting capitalism as a sys- 
tem contrary to the principles of morals and religion 
have uncritically and lightheartedly adopted all the 
economic teachings of the socialists and communists. 
Like the Maxians, they ascribe all ills— economic crises, 
unemployment, poverty, crime, and many other evils 
— to the operation of capitalism, and everything that 
is satisfactory — the higher standard of living in the 
capitalistic countries, the progress of technology, the 
drop in mortality rates, and so on — to the operation of 
government and of the labor unions. They have un- 
wittingly espoused all the tenets of Marxism minus its 
— merely incidental — atheism. This surrender of phil- 
osophical ethics and of religion to the anticapitalistic 
teachings is the greatest triumph of socialist and inter- 
ventionist propaganda. It is bound to degrade philo- 
sophical ethics and religion to mere auxiliaries of the 
forces seeking the destruction of Western civilization. 
In calling capitalism unjust and declaring that its aboli- 
tion will establish justice, moralists and churchmen ren- 
der a priceless service to the cause of the socialists and 
interventionists and relieve them of their greatest em- 
barrassment, the impossibility of refuting the econo- 
mists' criticism of their plans by discursive reasoning. 


It must be reiterated that no reasoning founded on 
the principles of philosophical ethics or of the Christian 
creed can reject as fundamentally unjust an economic 
system that succeeds in improving the material condi- 
tions of all people, and assign the epithet "just" to a 
system that tends to spread poverty and starvation. The 
evaluation of any economic system must be made by 
careful analysis of its effects upon the welfare of peo- 
ple, not by an appeal to an arbitrary concept of justice 
which neglects to take these effects into full account. 

Chapter 16. Present-Day Trends and the Future 

1. The Reversal of the Trend toward Freedom 

From the seventeenth century on, philosophers 
in dealing with the essential content of history began to 
stress the problems of liberty and bondage. Their con- 
cepts of both were rather vague, borrowed from the 
political philosophy of ancient Greece and influenced by 
the prevailing interpretation of the conditions of the 
Germanic tribes whose invasions had destroyed Rome's 
Western empire. As these thinkers saw it, freedom was 
the original state of mankind and the rule of kings 
emerged only in the course of later history. In the scrip- 
tural relation of the inauguration of the kingship of Saul 
they found confirmation of their doctrine as well as a 
rather unsympathetic description of the characteristic 
marks of royal government. 1 Historical evolution, they 
concluded, had deprived man of his inalienable right of 

The philosophers of the Enlightenment were almost 
unanimous in rejecting the claims of hereditary royalty 
and in recommending the republican form of govern- 
ment. The royal police forced them to be cautious in the 
expression of their ideas, but the public could read be- 
tween the lines. On the eve of the American and the 
French revolutions monarchy had lost its age-old hold 

1. I Samuel 8; 11-18. 



on men's minds. The enormous prestige enjoyed by 
England, then the world's richest and most powerful 
nation, suggested the compromise between the two in- 
compatible principles of government which had worked 
rather satisfactorily in the United Kingdom. But the old 
indigenous dynasties of continental Europe were not 
prepared to acquiesce in their reduction to a merely 
ceremonial position such as the alien dynasty of Great 
Britain had finally accepted, though only after some 
resistance. They lost their crowns because they dis- 
dained the role of what the Count of Chambord had 
called "the legitimate king of the revolution." 

In the heyday of liberalism the opinion prevailed 
that the trend toward government by the people is irre- 
sistible. Even the conservatives who advocated a return 
to monarchical absolutism, status privileges for the 
nobility, and censorship were more or less convinced 
that they were fighting for a lost cause. Hegel, the cham- 
pion of Prussian absolutism, found it convenient to pay 
lip service to the universally accepted philosophical 
doctrine in defining history as "progress in the con- 
sciousness of freedom." 

But then arose a new generation that rejected all the 
ideals of the liberal movement without, like Hegel, con- 
cealing their true intentions behind a hypocritical rever- 
ence for the word freedom. In spite of his sympathies 
with the tenets of these self-styled social reformers, John 
Stuart Mill could not help branding their projects — and 
especially those of Auguste Comte — liberticide. 2 In the 

2. Letter to Harriet Mill, Jan. 15, 1855. F. A. Hayek, John Stuart 
Mill and Harriet Taylor (Chicago, University of Chicago Press, 1951), 
p. 216. 


eyes of these new radicals the most depraved enemies of 
mankind were not the despots but the "bourgeois" 
who had evicted them. The bourgeoisie, they said, had 
deceived the people by proclaiming sham slogans of 
liberty, equality under the law, and representative gov- 
ernment. What the bourgeois were really intent upon 
was reckless exploitation of the immense majority of 
honest men. Democracy was in fact plutodemocracy, a 
blind to disguise the unlimited dictatorship of the capi- 
talists. What the masses needed was not freedom and 
a share in the administration of government affairs but 
the omnipotence of the "true friends" of the people, of 
the "vanguard" of the proletariat or of the charismatic 
Fuhrer. No reader of the books and pamphlets of revolu- 
tionary socialism could fail to realize that their authors 
sought not freedom but unlimited totalitarian despotism. 
But so long as the socialists had not yet seized power, 
they badly needed for their propaganda the institutions 
and the bills of rights of "plutocratic" liberalism. As an 
opposition party they could not do without the publicity 
the parliamentary forum offered them, nor without free- 
dom of speech, conscience, and the press. Thus willy- 
nilly they had to include temporarily in their program 
the liberties and civil rights which they were firmly 
resolved to abolish as soon as they seized power. For, 
as Bukharin declared after the conquest of Russia by 
the Bolshevists, it would have been ridiculous to demand 
from the capitalists liberty for the workers' movement 
in any other way than by demanding liberty for all.* 

3. Bukharin, Programme of the Communists (Bolsheviks), ed. 
by the Group of English Speaking Communists in Russia (1919), 
pp. 28-9. 


In the first years of their regime the Soviets did not 
bother to conceal their abhorrence of popular govern- 
ment and civil liberties, and openly praised their dicta- 
torial methods. But in the later thirties they realized 
that an undisguised antifreedom program was unpop- 
ular in Western Europe and North America. As, fright- 
ened by German rearmament, they wanted to establish 
friendly relations with the West, they suddenly changed 
their attitude toward the terms (not the ideas) of 
democracy, constitutional government, and civil liber- 
ties. They proclaimed the slogan of the "popular front" 
and entered into alliance with the rival socialist factions 
which up to that moment they had branded social 
traitors. Russia got a constitution, which all over the 
world was praised by servile scribblers as the most per- 
fect document in history in spite of its being based on 
the one-party principle, the negation of all civic liberties. 
From that time on the most barbaric and despotic of 
governments began to claim for itself the appellation 
"people's democracy." 

The history of the nineteenth and twentieth centuries 
has discredited the hopes and the prognostications of 
the philosophers of the Enlightenment. The peoples did 
not proceed on the road toward freedom, constitutional 
government, civil rights, free trade, peace, and good 
will among nations. Instead the trend is toward totali- 
tarianism, toward socialism. And once more there are 
people who assert that this trend is the ultimate phase 
of history and that it will never give way to another 


2. The Rise of the Ideology of Equality 
in Wealth and Income 

From time immemorial the living philosophy of the 
plain man has unquestioningly accepted the fact of 
status differences as well as the necessity of subordina- 
tion to those in power. Man's primary need is protection 
against malicious onslaughts on the part of other men 
and groups of men. Only when safe from hostile attacks 
can he gather food, build a home, rear a family, in short, 
survive. Life is the first of all goods, and no price to be 
paid for its preservation appeared too high to people 
harassed by predatory raids. To remain alive as a slave, 
they thought, is still better than to be killed. Lucky are 
those who enjoy the patronage of a benevolent master, 
but even a harsh overlord is to be preferred to no pro- 
tection at all. Men are born unequal. Some are stronger 
and smarter, some are weaker and clumsier. The latter 
had no choice but to surrender to the former and link 
their own destiny with that of a mighty suzerain. God, 
declared the priests, ordained it this way. 

This was the ideology that animated the social organi- 
zation which Ferguson, Saint-Simon, and Herbert Spen- 
cer called militaristic and which present-day American 
writers call feudal. Its prestige began to decline when 
the warriors who fought the warlord's battles became 
aware that the preservation of their chieftain's power 
depended on their own gallantry and, made self-reliant 
by this insight, asked a share in the conduct of the affairs 
of state. The conflicts resulting from this claim of the 


aristocrats engendered ideas which were bound to ques- 
tion and finally to demolish the doctrine of the social 
necessity of status and caste distinctions. Why, asked 
the commoners, should the noblemen enjoy privileges 
and rights that are denied to us? Does not the flowering 
of the commonwealth depend on our toil and trouble? 
Do the affairs of state concern only the king and the 
barons and not the great majority of us? We pay the 
taxes and our sons bleed on the battlefields, but we have 
no voice in the councils in which the king and the repre- 
sentatives of the nobility determine our fate. 

No tenable argument could be opposed to these pre- 
tensions of the tiers etat. It was anachronistic to preserve 
status privileges that had originated from a type of mili- 
tary organization which had long since been abandoned. 
The discrimination practiced against commoners by the 
princely courts and "good society" was merely a nui- 
sance. But the disdainful treatment, in the armies and 
in the diplomatic and civil service, of those who were 
not of noble extraction caused disasters. Led by aristo- 
cratic nincompoops, the French royal armies were 
routed; yet there were many commoners in France 
who later proved their brilliancy in the armies of the 
Revolution and the Empire. England's diplomatic, mili- 
tary, and naval accomplishments were evidently due in 
part to the fact that it had opened virtually all careers 
to every citizen. The demolition of the Bastille and the 
abolition of the privileges of the French nobility were 
hailed all over the world by the elite, in Germany by 
Kant, Goethe, and Schiller, among others. In imperial 
Vienna Beethoven wrote a symphony to honor the com- 


mander of the armies of the Revolution who had de- 
feated the Austrian forces, and was deeply grieved when 
the news came that his hero had overthrown the repub- 
lican form of government. The principles of freedom, 
equality of all men under the law, and constitutional 
government were with little opposition approved by 
public opinion in all Western countries. Guided by these 
principles, it was held, mankind was marching forward 
into a new age of justice and prosperity. 

However, there was no unanimity in the interpreta- 
tion of the concept of equality. For all of its champions 
it meant the abolition of status and caste privileges and 
the legal disabilities of the "lower" strata, and especially 
of slavery and serfdom. But there were some who advo- 
cated the leveling of differences in wealth and income. 

To understand the origin and the power of this egali- 
tarian ideology one must realize that is was stimulated 
by the resumption of an idea which for thousands of 
years all over the world had inspired reform movements 
as well as the merely academic writings of Utopian 
authors: the idea of equal ownership of land. All the 
evils that plagued mankind were ascribed to the fact 
that some people had appropriated more land than they 
needed for the support of their families. The corollary 
of the abundance of the lord of the manor was the 
penury of the landless. This iniquity was seen as the 
cause of crime, robbery, conflict, and bloodshed. All 
these mischiefs would disappear in a society consisting 
exclusively of farmers who could produce in their own 
household what they needed for the support of their 
families, and neither more nor less. In such a common- 


wealth there would be no temptations. Neither indi- 
viduals nor nations would covet what by rights belongs 
to others. There would be neither tyrants nor con- 
querors, for neither aggression nor conquest would pay. 
There would be eternal peace. 

Equal distribution of land was the program that 
prompted the Gracchi in ancient Rome, the peasant 
revolts which again and again disturbed all European 
countries, the agrarian reforms aimed at by various 
Protestant sects and by the Jesuits in the organization 
of their famous Indian community in what is now Para- 
guay. The fascination of this utopia enticed many of the 
most noble minds, among them Thomas Jefferson. It 
influenced the program of the Social Revolutionaries, 
the party which recruited the immense majority of the 
people in Imperial Russia. It is the program today of 
hundreds of millions in Asia, Africa, and Latin America 
whose endeavors meet, paradoxically enough, with the 
support of the foreign policy of the United States. 

Yet, the idea of equal distribution of land is a perni- 
cious illusion. Its execution would plunge mankind into 
misery and starvation, and would in fact wipe out civili- 
zation itself. 

There is no room in the context of this program for 
any kind of division of labor but regional specialization 
according to the particular geographical conditions of 
the various territories. The scheme, when consistently 
carried to its ultimate consequences, does not even pro- 
vide for doctors and blacksmiths. It fails to take into 
account the fact that the present state of the produc- 
tivity of land in the economically advanced countries 


is a result of the division of labor which supplies tools 
and machines, fertilizer, electric current, gasoline, and 
many other things that multiply the quantity and im- 
prove the quality of the produce. Under the system of 
the division of labor the farmer does not grow what he 
can make direct use of for himself and his family, but 
concentrates upon those crops for which his piece of 
soil offers comparatively the most favorable opportu- 
nities. He sells the produce on the market and buys on 
the market what he and his family need. The optimum 
size of a farm no longer has any relation to the size of 
the farmer's family. It is determined by technological 
considerations: the highest possible output per unit of 
input. Like other entrepreneurs the farmer produces for 
profit, i.e., he grows what is most urgently needed by 
every member of society for his use, and not what he and 
his family alone can directly use for their own consump- 
tion. But those who desire equal distribution of land 
stubbornly refuse to take notice of all these results of an 
evolution of many thousands of years, and dream of re- 
turning land utilization to a state long ago rendered 
obsolete. They would undo the whole of economic his- 
tory, regardless of consequences. They disregard the 
fact that under the primitive methods of land tenure 
which they recommend our globe could not support 
more than a fraction of the population now inhabiting 
it, and even this fraction only at a much lower standard 
of living. 

It is understandable that ignorant paupers in back- 
ward countries cannot think of any other way for the 
improvement of their conditions than the acquisition of 


a piece of land. But it is unpardonable that they are 
confirmed in their illusions by representatives of ad- 
vanced nations who call themselves experts and should 
know very well what state of agriculture is required to 
make a people prosperous. The poverty of the backward 
countries can be eradicated only by industrialization and 
its agricultural corollary, the replacement of land utili- 
zation for the direct benefit of the farmer's household 
by land utilization to supply the market. 

The sympathetic support with which schemes for 
land distribution meet today and have met in the past 
from people enjoying all the advantages of life under 
the division of labor has never been based in any realis- 
tic regard for the inexorable nature-given state of affairs. 
It is rather the outcome of romantic illusions. The cor- 
rupt society of decaying Rome, deprived of any share in 
the conduct of public affairs, bored and frustrated, fell 
into reveries about the imagined happiness of the simple 
life of self-sufficient farmers and shepherds. The still 
more idle, corrupt, and bored aristocrats of the ancien 
regime in France found pleasure in a pastime they chose 
to call dairy farming. Present-day American millionaires 
pursue farming as a hobby which has the added advan- 
tage that its costs reduce the amount of income tax due. 
These people look upon farming less as a branch of 
production than as a distraction. 

A seemingly plausible plea for expropriation of the 
landholdings of the aristocracy could be made out at 
the time the civil privileges of the nobility were revoked. 
Feudal estates were princely gifts to the ancestors of 
the aristocratic owners in compensation for military 


services rendered in the past and to be rendered in the 
future. They provided the means to support the king's 
armed retinue, and the size of the holding allotted to 
the individual liegeman was determined by his rank 
and position in the forces. But as military conditions 
changed and the armies were no longer composed of 
vassals called up, the prevailing system of land distribu- 
tion became anachronistic. There seemed to be no rea- 
son to let the squires keep revenues accorded as com- 
pensation for services they no longer rendered. It 
seemed justifiable to take back the fiefs. 

Such arguments could not be refuted form the point 
of view of the doctrine to which the aristocrats them- 
selves resorted in defense of their status privileges. They 
stood on their traditional rights, pointing to the value 
of the services their forbears had rendered to the nation. 
But as it was obvious that they themselves no longer 
rendered such indispensable services, it was correct to 
infer that all the benefits received as reward for these 
services should be canceled. This included revocation 
of the land grants. 

From the point of view of the liberal economists, 
however, such confiscation appeared an unnecessary 
and dangerous disruption of the continuity of economic 
evolution. What was needed was the abolition of all 
those legal institutions that sheltered the inefficient 
proprietor against the competition of more efficient 
people who could utilize the soil to produce better and 
more cheaply. The laws that withdrew the estates of 
the noblemen from the market and the supremacy of the 
consumers — such as entails and the legal inability of 


commoners to acquire ownership by purchase — must 
be repealed. Then the supremacy of the market would 
shift control of land into the hands of those who know 
how to supply the consumers in the most efficient way 
with what they ask for most urgently. 

Unimpressed by the dreams of the Utopians, the econ- 
omists looked upon the soil as a factor of production. 
The rightly understood interests of all the people de- 
manded that the soil, like all other material factors of 
production, should be controlled by the most efficient 
entrepreneurs. The economists had no arbitrary prefer- 
ence for any special size of the farms: that size was 
best which secured the most efficient utilization. They 
did not let themselves be fooled by the myth that it was 
in the interest of the nation to have as many of its mem- 
bers as possible employed in agriculture. On the con- 
trary, they were fully aware that is was beneficial not 
only to the rest of the nation but also to those employed 
in agriculture if waste of manpower was avoided in this 
as in all other branches of production. The increase in 
material well-being was due to the fact that, thanks to 
technological progress, a continually shrinking percent- 
age of the whole population was sufficient to turn out 
all the farm products needed. Attempts to meddle with 
this secular evolution which more and more reduced 
the ratio of the farm population as against the nonfarm 
population were bound to lower the average standard 
of living. Mankind is the more prosperous the smaller 
the percentage of its total numbers employed in produc- 
ing all the quantities of food and raw materials required. 
If any sense can be attached to the term "reactionary," 


then the endeavors to preserve by special measures those 
small-size farms which cannot hold their own in the 
competition of the market are certainly to be called 
reactionary. They tend to substitute a lower degree of 
the division of labor for a higher degree and thus slow 
down or entirely stop economic improvement. Let the 
consumers determine what size of farm best suits their 

The economists' critique of the agrarian utopia was 
highly unpopular. Nevertheless the weight of their argu- 
ments succeeded for a time in checking the zeal of the 
reformers. Only after the end of the first World War 
did the ideal of an agriculture predominantly or even 
exclusively operated by small fanners again attain the 
role it plays today in world politics. 

The great historical and political importance of the 
idea of equal distribution of land is to be seen in the 
fact that it paved the way for the acceptance of social- 
ism and communism. The Marxian socialists were aca- 
demically opposed to it and advocated the nationaliza- 
tion of agriculture. But they used the slogan "equal dis- 
tribution of land ownership" as a lever to incite the 
masses in the economically underdeveloped countries. 
For the illiterate rural population of these nations the 
nostrum "socialization of business" was meaningless. But 
all their instincts of envy and hatred were aroused when 
politicians promised them the land of the kulaks and the 
owners of big estates. When during F. D. Roosevelt's 
administration pro-communists in the United States gov- 
ernment and the American press asserted that the Chi- 
nese "leftists" were not communists but "merely agrar- 


ian reformers," they were right insofar as the Chinese 
agents of the Soviets had adopted Lenin's clever trick 
of inaugurating the socialist revolution by resorting to 
the most popular slogans and concealing one's own real 
intentions. Today we see how in aH economically under- 
developed countries the scheme of land confiscation and 
redistribution makes the most effective propaganda for 
the Soviets. 

The scheme is manifestly inapplicable to the countries 
of Western civilization. The urban population of an 
industrialized nation cannot be lured by the prospect of 
such an agrarian reform. Its sinister effect upon the 
thinking of the masses in the capitalistic countries con- 
sists in its rendering sympathetic the program of wealth 
and income equality. It thus makes popular interven- 
tionist policies which must inevitably lead to full social- 
ism. To stress this fact does not mean that any socialist 
or communist regime would ever really bring about 
equalization of income. It is merely to point out that 
what makes socialism and communism popular is not 
only the illusory belief that they will give enormous 
riches to everybody but the no less illusory expectation 
that nobody will get more than anybody else. Envy is 
of course one of the deepest human emotions. 

The American "progressives" who are stirring up their 
countrymen as well as all foreigners to envy and hatred 
and are vehemently asking for the equalization of wealth 
and incomes do not see how these ideas are interpreted 
by the rest of the world. Foreign nations look upon all 
Americans, including the workers, with the same jeal- 
ousy and hostility with which the typical American 


union member looks upon those whose income exceeds 
his own. In the eyes of foreigners, the American tax- 
payers have been motivated merely by bad conscience 
and fear when they spent billions to improve conditions 
abroad. Public opinion in Asia, Africa, Latin America, 
and many European countries views this system of 
foreign aid as socialist agitators do money laid out by 
the rich for charity: a pittance meant to bribe the poor 
and prevent them from taking what by rights belongs 
to them. Statesmen and writers who recommend that 
their nations should side with the United States against 
Russia are no less unpopular with their countrymen 
than those few Americans who have the courage to 
speak for capitalism and to reject socialism are with 
their fellow citizens. In Gerhard Hauptmann's play Die 
Weber, one of the most effective pieces of German anti- 
capitalistic literature, the wife of a businessman is 
startled when she realizes that people behave as if it 
were a crime to be rich. Except for an insignificant 
minority, everyone today is prepared to take this con- 
demnation of wealth for granted. This mentality spells 
the doom of American foreign policy. The United States 
is condemned and hated because it is prosperous. 

The almost uncontested triumph of the egalitarian 
ideology has entirely obliterated all other political 
ideals. The envy-driven masses do not care a whit for 
what the demagogues call the "bourgeois" concern for 
freedom of conscience, of thought, of the press, for 
habeas corpus, trial by jury, and all the rest. They long 
for the earthly paradise which the socialist leaders 
promise them. Like these leaders, they are convinced 


that the 'liquidation of the bourgeois" will bring them 
back into the Garden of Eden. The irony is that nowa- 
days they are calling this program the liberal program. 

3. The Chimera of a Perfect State of Mankind 

All doctrines that have sought to discover in the 
course of human history some definite trend in the se- 
quence of changes have disagreed, in reference to the 
past, with the historically established facts, and where 
they tried to predict the future have been spectacularly 
proved wrong by later events. 

Most of these doctrines were characterized by refer- 
ence to a state of perfection in human affairs. They 
placed this perfect state either at the beginning of his- 
tory or at its end or at both its beginning and its end. 
Consequently, history appeared in their interpretation 
as a progressive deterioration or a progressive improve- 
ment or as a period of progressive deterioration to be 
followed by one of progressive improvement. With some 
of these doctrines the idea of a perfect state was rooted 
in religious beliefs and dogmas. However, it is not the 
task of secular science to enter into an analysis of these 
theological aspects of the matter. 

It is obvious that in a perfect state of human affairs 
there cannot be any history. History is the record of 
changes. But the very concept of perfection implies the 
absence of any change, as a perfect state can only be 
transformed into a less perfect state, i.e., can only be 
impaired by any alteration. If one places the state of 
perfection only at the supposed beginning of history, 


one asserts that the age of history was preceded by an 
age in which there was no history and that one day some 
events which disturbed the perfection of this original 
age inaugurated the age of history. If one assumes that 
history tends toward the realization of a perfect state, 
one asserts that history will one day come to an end. 

It is man's nature to strive ceaselessly after the sub- 
stitution of more satisfactory conditions for less satis- 
factory. This motive stimulates his mental energies and 
prompts him to act. Life in a perfect frame would re- 
duce man to a purely vegetative existence. 

History did not begin with a golden age. The condi- 
tions under which primitive man lived appear in the 
eyes of later ages rather unsatisfactory. He was sur- 
rounded by innumerable dangers that do not threaten 
civilized man at all, or at least not to the same degree. 
Compared with later generations, he was extremely poor 
and barbaric. He would have been delighted if opportu- 
nity had been given to him to take advantage of any of 
the achievements of our age, as for instance the methods 
of healing wounds. 

Neither can mankind ever reach a state of perfec- 
tion. The idea that a state of aimlessness and indiffer- 
ence is desirable and the most happy condition that 
mankind could ever attain permeates Utopian literature. 
The authors of these plans depict a society in which no 
further changes are required because everything has 
reached the best possible form. In Utopia there will no 
longer be any reason to strive for improvement because 
everything is already perfect, History has been brought 
to a close. Henceforth all people will be thoroughly 


happy. 1 It never occurred to one of these writers that 
those whom they were eager to benefit by the reform 
might have different opinions about what is desirable 
and what not. 

A new sophisticated version of the image of the per- 
fect society has arisen lately out of a crass misinterpre- 
tation of the procedure of economics. In order to deal 
with the effects of changes in the market situation, the 
endeavors to adjust production to these changes, and 

1. In this sense Karl Marx too must be called a Utopian. He too 
aimed at a state of affairs in which history will come to a standstill. 
For history is, in the scheme of Marx, the history of class struggles. 
Once classes and the class struggle are abolished, there can no longer 
be any history. It is true, that the Communist Manifesto merely 
declares that the history of all hitherto existing society, or, as Engels 
later added, more precisely, the history after the dissolution of the 
golden age of primeval communism, is the history of class struggles 
and thus does not exclude the interpretation that after the establish- 
ment of the socialist millennium some new content of history could 
emerge. But the other writings of Marx, Engels, and their disciples 
do not provide any indication that such a new type of historical 
changes, radically different in nature from those of the preceding 
ages of class struggles, could possibly come into being. What further 
changes can be expected once the higher phase of communism is 
attained, in which everybody gets all he needs? — The distinction 
that Marx made between his own "scientific" socialism and the socialist 
plans of older authors whom he branded as Utopians refers not only 
to the nature and organization of the socialist commonwealth but 
also to the way in which this commonwealth is supposed to come into 
existence. Those whom Marx disparaged as Utopians constructed the 
design of a socialist paradise and tried to convince people that its 
realization is highly desirable. Marx rejected this procedure. He pre- 
tended to have discovered the law of historical evolution according 
to which the coming of socialism is inevitable. He saw the short- 
comings of the Utopian socialists, their Utopian character, in the fact 
that they expected the coming of socialism from the will of people, 
i.e., their conscious action, while his own scientific socialism asserted 
that socialism will come, independently of the will of men, by the 
evolution of the material productive forces. 


the phenomena of profit and loss, the economist con- 
structs the image of a hypothetical, although unattain- 
able, state of affairs in which production is always fully 
adjusted to the realizable wishes of the consumers and 
no further changes whatever occur. In this imaginary 
world tomorrow does not differ from today, no mal- 
adjustments can arise, and no need for any entrepre- 
neurial action emerges. The conduct of business does 
not require any initiative, it is a self-acting process un- 
consciously performed by automatons impelled by mys- 
terious quasi-instincts. There is for economists (and, 
for that matter, also for laymen discussing economic 
issues ), no other way to conceive what is going on in the 
real, continually changing world than to contrast it in 
this way with a fictitious world of stability and absence 
of change. But the economists are fully aware that the 
elaboration of this image of an evenly rotating economy 
is merely a mental tool that has no counterpart in the 
real world in which man lives and is called to act. They 
did not even suspect that anybody could fail to grasp 
the merely hypothetical and ancillary character of their 

Yet some people misunderstood the meaning and sig- 
nificance of this mental tool. In a metaphor borrowed 
from the theory of mechanics, the mathematical econ- 
omists call the evenly rotating economy the static state, 
the conditions prevailing in it equilibrium, and any devi- 
ation from equilibrium disequilibrium. This language 
suggests that there is something vicious in the very fact 
that there is always disequilibrium in the real economy 
and that the state of equilibrium never becomes actual. 


The merely imagined hypothetical state of undisturbed 
equilibrium appears as the most desirable state of real- 
ity. In this sense some authors call competition as it 
prevails in the changing economy imperfect competi- 
tion. The truth is that competition can exist only in a 
changing economy. Its function is precisely to wipe out 
disequilibrium and to generate a tendency toward the 
attainment of equilibrium. There cannot be any compe- 
tition in a state of static equilibrium because in such a 
state there is no point at which a competitor could inter- 
fere in order to perform something that satisfies the con- 
sumers better than what is already performed anyway. 
The very definition of equilibrium implies that there 
is no maladjustment anywhere in the economic system, 
and consequently no need for any action to wipe out 
maladjustments, no entrepreneurial activity, no entre- 
preneurial profits and losses. It is precisely the absence 
of the profits that prompts mathematical economists 
to consider the state of undisturbed static equilibrium as 
the ideal state, for they are inspired by the preposses- 
sion that entrepreneurs are useless parasites and profits 
are unfair lucre. 

The equilibrium enthusiasts are also deluded by am- 
biguous thymological connotations of the term "equilib- 
rium," which of course have no reference whatever to 
the way in which economics employs the imaginary con- 
struction of a state of equilibrium. The popular notion 
of a man's mental equilibrium is vague and cannot be 
particularized without including arbitrary judgments of 
value. All that can be said about such a state of mental 
or moral equilibrium is that it cannot prompt a man 


toward any action. For action presupposes some uneasi- 
ness felt, as its only aim can be the removal of uneasi- 
ness. The analogy with the state of perfection is obvious. 
The fully satisfied individual is purposeless, he does not 
act, he has no incentive to think, he spends his days in 
leisurely enjoyment of life. Whether such a fairy-like 
existence is desirable may be left undecided. It is cer- 
tain that living men can never attain such a state of 
perfection and equilibrium. It is no less certain that, 
sorely tried by the imperfections of real life, people will 
dream of such a thorough fulfillment of all their wishes. 
This explains the sources of the emotional praise of 
equilibrium and condemnation of disequilibrium. 

However, economists must not confuse this thymo- 
logical notion of equilibrium with the use of the imagi- 
nary construction of a static economy. The only service 
that this imaginary construction renders is to set off in 
sharp relief the ceaseless striving of living and acting 
men after the best possible improvement of their condi- 
tions. There is for the unaffected scientific observer 
nothing objectionable in his description of disequilib- 
rium. It is only the passionate pro-socialist zeal of math- 
ematical pseudo-economists that transforms a purely 
analytical tool of logical economics into an Utopian 
image of the good and most desirable state of affairs. 

4. The Alleged Unbroken Trend toward Progress 

A realistic philosophical interpretation of history 
must abstain from any reference to the chimerical notion 
of a perfect state of human affairs. The only basis from 


which a realistic interpretation can start is the fact that 
man, like all other living beings, is driven by the impulse 
to preserve his own existence and to remove, as far as 
possible, any uneasiness he feels. It is from this point of 
view that the immense majority of people appraise the 
conditions under which they have to live. It would be 
erroneous to scorn their attitude as materialism in the 
ethical connotation of the term. The pursuit of all those 
nobler aims which the moralists contrast with what they 
disparage as merely materialistic satisfactions presup- 
poses a certain degree of material well-being. 

The controversy about the monogenetic or polyge- 
netic origin of Homo sapiens is, as has been pointed out 
above, 1 of little importance for history. Even if we as- 
sume that all men are the descendants of one group of 
primates, which alone evolved into the human species, 
we have to take account of the fact that at a very early 
date dispersion over the surface of the earth broke up 
this original unity into more or less isolated parts. For 
thousands of years each of these parts lived its own life 
with little or no intercourse with other parts. It was 
finally the development of the modern methods of 
marketing and transportation that put an end to the 
isolation of various groups of men. 

To maintain that the evolution of mankind from its 
original conditions to the present state followed a defi- 
nite line is to distort historical fact. There was neither 
uniformity nor continuity in the succession of historical 
events. It is still less permissible to apply to historical 
changes the terms growth and decay, progress and 

1. See above, pp. 219 f. 


retrogression, improvement and deterioration if the his- 
torian or philosopher does not arbitrarily pretend to 
know what the end of human endeavor ought to be. 
There is no agreement among people on a standard by 
which the achievements of civilization can be said to 
be good or bad, better or worse. 

Mankind is almost unanimous in its appraisal of the 
material accomplishments of modern capitalistic civili- 
zation. The immense majority considers the higher 
standard of living which this civilization secures to the 
average man highly desirable. It would be difficult to 
discover, outside of the small and continually shrinking 
group of consistent ascetics, people who do not wish 
for themselves and their families and friends the enjoy- 
ment of the material paraphernalia of Western capital- 
ism. If, from this point of view, people assert that "we" 
have progressed beyond the conditions of earlier ages, 
their judgment of value agrees with that of the majority. 
But if they assume that what they call progress is a 
necessary phenomenon and that there prevails in the 
course of events a law that makes progress in this sense 
go on forever, they are badly mistaken. 

To disprove this doctrine of an inherent tendency to- 
ward progress that operates automatically, as it were, 
there is no need to refer to those older civilizations in 
which periods of material improvement were followed 
by periods of material decay or by periods of standstill. 
There is no reason whatever to assume that a law of 
historical evolution operates necessarily toward the im- 
provement of material conditions or that trends which 
prevailed in the recent past will go on in the future too. 


What is called economic progress is the effect of an 
accumulation of capital goods exceeding the increase in 
population. If this trend gives way to a standstill in the 
further accumulation of capital or to capital decumula- 
tion, there will no longer be progress in this sense of the 

Everyone but the most bigoted socialists agrees that 
the unprecedented improvement in economic conditions 
which has occurred in the last two hundred years is an 
achievement of capitalism. It is, to say the least, pre- 
mature to assume that the tendency toward progressive 
economic improvement will continue under a different 
economic organization of society. The champions of 
socialism reject as ill-considered all that economics has 
advanced to show that a socialist system, being unable 
to establish any kind of economic calculation, would 
entirely disintegrate the system of production. Even if 
the socialists were right in their disregard for the eco- 
nomic analysis of socialism, this would not yet prove 
that the trend toward economic improvement will or 
could go on under a socialist regima 

5. The Suppression of "Economic" Freedom 

A civilization is the product of a definite world view, 
and its philosophy manifests itself in each of its accom- 
plishments. The artifacts produced by men may be 
called material. But the methods resorted to in the ar- 
rangement of production activities are mental, the out- 
come of ideas that determine what should be done and 


how. All the branches of a civilization are animated by 
the spirit that permeates its ideology. 

The philosophy that is the characteristic mark of the 
West and whose consistent elaboration has in the last 
centuries transformed all social institutions has been 
called individualism. It maintains that ideas, the good 
ones as well as the bad, originate in the mind of an 
individual man. Only a few men are endowed with the 
capacity to conceive new ideas. But as political ideas can 
work only if they are accepted by society, it rests with 
the crowd of those who themselves are unable to de- 
velop new ways of thinking to approve or disapprove 
the innovations of the pioneers. There is no guarantee 
that these masses of followers and routinists will make 
wise use of the power vested in them. They may reject 
the good ideas, those whose adoption would benefit 
them, and espouse bad ideas that will seriously hurt 
them. But if they choose what is worse, the fault is not 
theirs alone. It is no less the fault of the pioneers of the 
good causes in not having succeeded in bringing for- 
ward their thoughts in a more convincing form. The 
favorable evolution of human affairs depends ultimately 
on the ability of the human race to beget not only 
authors but also heralds and disseminators of beneficial 

One may lament the fact that the fate of mankind is 
determined by the — certainly not infallible — minds of 
men. But such regret cannot change reality. In fact, 
the eminence of man is to be seen in his power to choose 
between good and evil. It is precisely this that the theo- 


logians had in view when they praised God for having 
bestowed upon man the discretion to make his choice 
between virtue and vice. 

The dangers inherent in the masses' incompetence 
are not eliminated by transferring the authority to make 
ultimate decisions to the dictatorship of one or a few 
men, however excellent. It is an illusion to expect that 
despotism will always side with the good causes. It 
is characteristic of despotism that it tries to curb the 
endeavors of pioneers to improve the lot of their fellow 
men. The foremost aim of despotic government is to 
prevent any innovations that could endanger its own 
supremacy. Its very nature pushes it toward extreme 
conservatism, the tendency to retain what is, no matter 
how desirable for the welfare of the people a change 
might be. It is opposed to new ideas and to any spon- 
taneity on the part of the subjects. 

In the long run even the most despotic governments 
with all their brutality and cruelty are no match for 
ideas. Eventually the ideology that has won the support 
of the majority will prevail and cut the ground from 
under the tyrant's feet. Then the oppressed many will 
rise in rebellion and overthrow their masters. However, 
this may be slow to come about, and in the meantime 
irreparable damage may have been inflicted upon the 
common weal. In addition a revolution necessarily 
means a violent disturbance of social cooperation, 
produces irreconcilable rifts and hatreds among the 
citizens, and may engender bitterness that even cen- 
turies cannot entirely wipe out. The main excellence and 
worth of what is called constitutional institutions, de- 


mocracy and government by the people is to be seen in 
the fact that they make possible peaceful change in the 
methods and personnel of government. Where there is 
representative government, no revolutions and civil 
wars are required to remove an unpopular ruler and his 
system. If the men in office and their methods of con- 
ducting public affairs no longer please the majority of 
the nation, they are replaced in the next election by 
other men and another system. 

In this way the philosophy of individualism demol- 
ished the doctrine of absolutism, which ascribed heav- 
enly dispensation to princes and tyrants. To the alleged 
divine right of the anointed kings it opposed the inalien- 
able rights bestowed upon man by his Creator. As 
against the claim of the state to enforce orthodoxy and 
to exterminate what it considered heresy, it proclaimed 
freedom of conscience. Against the unyielding preser- 
vation of old institutions become obnoxious with the 
passing of time, it appealed to reason. Thus it inaugu- 
rated an age of freedom and progress toward prosperity. 

It did not occur to the liberal philosophers of the 
eighteenth and early nineteenth centuries that a new 
ideology would arise which would resolutely reject 
all the principles of liberty and individualism and 
would proclaim the total subjection of the individual to 
the tutelage of a paternal authority as the most desirable 
goal of political action, the most noble end of history and 
the consummation of all the plans God had in view in 
creating man. Not only Hume, Condorcet, and Ben- 
tham but even Hegel and John Stuart Mill would have 
refused to believe it if some of their contemporaries 


had prophesied that in the twentieth century most of 
the writers and scientists of France and the Anglo-Saxon 
nations would wax enthusiastic about a system of gov- 
ernment that eclipses all tyrannies of the past in pitiless 
persecution of dissenters and in endeavors to deprive the 
individual of all opportunity for spontaneous activity. 
They would have considered that man a lunatic who 
told them that the abolition of freedom, of all civil 
rights, and of government based on the consent of the 
governed would be called liberation. Yet all this has 

The historian may understand and give thymological 
explanations for this radical and sudden change in ideol- 
ogy. But such an interpretation in no way disproves the 
philosophers' and the economists' analysis and critique 
of the counterfeit doctrines that engendered this move- 

The key stone of Western civilization is the sphere 
of spontaneous action it secures to the individual. There 
have always been attempts to curb the individual's ini- 
tiative, but the power of the persecutors and inquisitors 
has not been absolute. It could not prevent the rise of 
Greek philosophy and its Roman offshoot or the develop- 
ment of modern science and philosophy. Driven by their 
inborn genius, pioneers have accomplished their work 
in spite of all hostility and opposition. The innovator 
did not have to wait for invitation or order from any- 
body. He could step forward of his own accord and defy 
traditional teachings. In the orbit of ideas the West has 
by and large always enjoyed the blessings of freedom. 


Then came the emancipation of the individual in the 
field of business, an achievement of that new branch of 
philosophy, economics. A free hand was given to the 
enterprising man who knew how to enrich his fellows 
by improving the methods of production. A horn of 
plenty was poured upon the common men by the capital- 
istic business principle of mass production for the satis- 
faction of the needs of the masses. 

In order to appraise justly the effects of the Western 
idea of freedom we must contrast the West with condi- 
tions prevailing in those parts of the world that have 
never grasped the meaning of freedom. 

Some oriental peoples developed philosophy and 
science long before the ancestors of the representatives 
of modern Western civilization emerged from primitive 
barbarism. There are good reasons to assume that Greek 
astronomy and mathematics got their first impulse from 
acquaintance with what had been accomplished in the 
East. When later the Arabs acquired a knowledge of 
Greek literature from the nations they had conquered, 
a remarkable Muslim culture began to flourish in Persia, 
Mesopotamia, and Spain. Up to the thirteenth century 
Arabian learning was not inferior to the contemporary 
achievements of the West. But then religious orthodoxy 
enforced unswerving conformity and put an end to all 
intellectual activity and independent thinking in the 
Muslim countries, as had happened before in China, in 
India, and in the orbit of Eastern Christianity. The 
forces of orthodoxy and persecution of dissenters, on 
the other hand, could not silence the voices of Western 


science and philosophy, for the spirit of freedom and 
individualism was already strong enough in the West 
to survive all persecutions. From the thirteenth century 
on all intellectual, political, and economic innovations 
originated in the West. Until the East, a few decades 
ago, was fructified by contact with the West, history in 
recording the great names in philosophy, science, liter- 
ature, technology, government, and business could 
hardly mention any Orientals. There was stagnation 
and rigid conservatism in the East until Western ideas 
began to filter in. To the Orientals themselves slavery, 
serfdom, untouchability, customs like sutteeism or the 
crippling of the feet of girls, barbaric punishments, mass 
misery, ignorance, superstition, and disregard of hy- 
giene did not give any offence. Unable to grasp the 
meaning of freedom and individualism, today they are 
enraptured with the program of collectivism. 

Although these facts are well known, millions today 
enthusiastically support policies that aim at the substi- 
tution of planning by an authority for autonomous plan- 
ning by each individual. They are longing for slavery. 

Of course, the champions of totalitarianism protest 
that what they want to abolish is "only economic free- 
dom" and that all "other freedoms" will remain un- 
touched. But freedom is indivisible. The distinction be- 
tween an economic sphere of human life and activity 
and a noneconomic sphere is the worst of their fallacies. 
If an omnipotent authority has the power to assign to 
every individual the tasks he has to perform, nothing 
that can be called freedom and autonomy is left to him. 


He has only the choice between strict obedience and 
death by starvation. 1 

Committees of experts may be called to advise the 
planning authority whether or not a young man should 
be given the opportunity to prepare himself for and to 
work in an intellectual or artistic field. But such an ar- 
rangement can merely rear disciples committed to the 
parrot-like repetition of the ideas of the preceding gen- 
eration. It would bar innovators who disagree with the 
accepted ways of thought. No innovation would ever 
have been accomplished if its originator had been in 
need of an authorization by those from whose doctrines 
and methods he wanted to deviate. Hegel would not 
have ordained Schopenhauer or Feuerbach, nor would 
Professor Rau have ordained Marx or Carl Menger. If 
the supreme planning board is ultimately to determine 
which books are to be printed, who is to experiment in 
the laboratories and who is to paint or to sculpture, 
and which alterations in technological methods should 
be undertaken, there will be neither improvement nor 
progress. Individual man will become a pawn in the 
hands of the rulers, who in their "social engineering" 
will handle him as engineers handle the stuff of which 
they construct buildings, bridges, and machines. In 
every sphere of human activity an innovation is a chal- 
lenge not only to all routinists and to the experts and 
practitioners of traditional methods but even more to 
those who have in the past themselves been innovators. 

1. Hayek, The Road to Serfdom (London, 1944), pp. 66 ff.; Mises, 
Socialism, p. 589. 


It meets at the beginning chiefly stubborn opposition. 
Such obstacles can be overcome in a society where there 
is economic freedom. They are insurmountable in a 
socialist system. 

The essence of an individual's freedom is the oppor- 
tunity to deviate from traditional ways of thinking and 
of doing things. Planning by an established authority 
precludes planning on the part of individuals. 

6. The Uncertainty of the Future 

The outstanding fact about history is that it is a suc- 
cession of events that nobody anticipated before they 
occurred. What the most far-seeing statesmen and busi- 
nessmen divine is at most conditions as they will de- 
velop in the near future, in a period in which by and 
large no radical changes in ideologies and in general 
conditions will take place. The British and French 
philosophers whose writings actuated the French Revo- 
lution, and the thinkers and poets of all Western nations 
who enthusiastically hailed the first steps in this great 
transformation, foresaw neither the reign of terror nor 
the way Babeuf and his followers would very soon 
interpret the principle of equality. None of the econ- 
omists whose theories demolished the precapitalistic 
methods of restricting economic freedom and none of 
the businessmen whose operations inaugurated the In- 
dustrial Revolution anticipated either the unprecedented 
achievements of free enterprise or the hostility with 
which those most benefited by capitalism would react to 
it. Those idealists who greeted as a panacea President 


Wilson's policy of "making the world safe for democ- 
racy" did not foresee what the effects would be. 

The fallacy inherent in predicting the course of his- 
tory is that the prophets assume no ideas will ever 
possess the minds of men but those they themselves 
already know of. Hegel, Comte, and Marx, to name only 
the most popular of these soothsayers, never doubted 
their own omniscience. Each was fully convinced that 
he was the man whom the mysterious powers provi- 
dently directing all human affairs had elected to con- 
summate the evolution of historical change. Henceforth 
nothing of importance could ever happen. There was 
no longer any need for people to think. Only one task 
was left to coming generations — to arrange all things 
according to the precepts devised by the messenger of 
Providence. In this regard there was no difference be- 
tween Mohammed and Marx, between the inquisitors 
and Auguste Comte. 

Up to now in the West none of the apostles of stabili- 
zation and petrification has succeeded in wiping out 
the individual's innate disposition to think and to apply 
to all problems the yardstick of reason. This alone, and 
no more, history and philosophy can assert in dealing 
with doctrines that claim to know exactly what the 
future has in store for mankind. 


Adjustment, 245 

"Agrarian Reformers" in China, 

359 f. 
Anchorites, 35, 37, 52 
Anti-Christianism, 149 f. 
A priori, 8 f. 
Arabian learning, 375 
Ascetics, 52 
Atheism, 50 f. 
Autarky, 234 

Babeuf, F. N., 329, 378 
Bagehot, Walter, 221 
Bastiat, Frederic, 168 f. 
Beethoven, 352 
Behaviorism, 245, 327 
Bentham, Jeremy, 67 f., 131 n., 

Bias, 26 ff., 33 f., 125 ff. 
Big business, 119, 147, 237 f. 
Bismarck, 144, 149 
Bohm-Bawerk, Eugen von, 207 
Bourgeoisie, 115, 129, 142 ff., 349 
Brentano, Franz, 36 n., 83 n. 
Breuer, Joseph, 152 
Buckle, Thomas Henry, 84 ff., 

Bukharin, N., 349 
Burckhardt, Jacob, 295 

Carnot's second law of thermody- 
namics, 211 ff. 

Castes, 113 ff., 352 

Causality, 74, 240 

Chambord, Henri, count of, 348 

Charcot, Jean Martin, 152 

Choosing, 12 ff., 25 

Christianity, 43 f., 171, 339 

Civilization, spiritual and mate- 
rial aspects of, 337 


Civilizations, classification of, 
220 ff. 

Classes, conflict of, 112 ff. 

Collectivism, 58 ff., 250 ff. 

Collingwood, R. G., 308 

Comparative cost, theory of, 29 

Competition, biological, 38, 40 

Comte, Auguste, 68, 170, 175 f., 
241, 262, 348, 379 

Concentration of wealth, 118 f. 

Condorcet, M. J. A., 376 

Conflicts, 41 f., 297; of collec- 
tives, 254 ff. 

Constants, 10 f. 

Continuity of economic evolu- 
tion, 357 

Costs, 209 f. 

Croce, Benedetto, 308 

Daniel, Book of, 170 

Dante, 180, 294 

Darwin, Charles, 171, 213 

Darwinism, social, 39 

Democracy, "people's," 350; and 

revolution, 373 
Despotism, 66, 372 
Determinism, 2, 73 ff., 77, 177 ff. 
Dialectics, 102 ff. 
Dialects, 233 f. 
Dilthey, Wilhelm, 200, 265, 308, 

Division of labor, 235 
Dualism, methodological, 1 
Durkheim, fimile, 190, 242 

Econometrics, 10 f. 

Economists and judgments of 

value, 29 f., 33 f . 
Egalitarianism, 328 



Engels, Friedrich, 104 ff., 121, 
148 f., 157, 185, 193 f., 218 

Enlightenment, 171 ff. 

Entralgo, Petro L., 154 n. 

Environment, 159 f., 324 

Environmentalism, 109 n., 324 ff. 

Ethics, intuitive, 52 f., and capi- 
talism, 341 ff. 

Equality, 263; principle of, 351 ff. 

Equilibrium, 365 ff. 

Events, historical, 10 f. 

Fabians, 144 

Farms, size of the, 355 ff. 

Fatalism, 78 ff. 

Felibrige, 233 f . 

Feudalism, 115 f., 351 

Feuerbach, Ludwig, 13 n., 377 

Fiction, 274 ff . 

Final causes, 161, 240, 247, 284 

Forces, material productive, 
106 ff. 

Franklin, Benjamin, 83 

Freedom, 347 ff.; alleged negati- 
vism of the concept of, 24 

Free will, 76 ff., 82, 179 ff. 

Freud, Sigmund, 27, 152 f., 268, 

Friedmann, Hermann, 266 n. 

Geist, 103 

Gestalt, 223 

Gestalt psychology, 253 

Goebbels, Joseph, 249 n. 

Gregoire, Henri, 291 n. 

Happiness, 12 ff., 62, 215 
Harmonists and antiharmonists, 

40 ff. 
Harmony of interests, 54 f. 
Haupbnann, Gerhard, 361 
Hayek, F. A., 377 n. 
Hegel, 102 ff., 156, 165, 170, 175, 

255, 348, 373, 377 
Hegelianism, 255 
Historians and judgments of 

value, 21, 298 ff. 
Historicism, 198 ff., 211, 285; 

critique of capitalism, 217 ff. 

History, 159 ff., 211, 274 ff. 
Human Action, 3ff., 20; sciences 

of, 92 ff. 
Humanism, 293 ff. 
Hume, David, 9, 66, 312, 373 

Ideas, the role of, 187 f., 224 ff. 
Ideology, Marxian sense of the 

term, 122 ff. 
Impoverishment, progressive, 

116 f. 
Indifference, 24 
Individualism, 58, 340, 371 
Individuality, 183, 188 
Individuals, 185, 191 
Induction, 9, 303 
Instincts, 194 f. 

Interests, 28, 30 ff., 133 ff., 236 ff. 
Intolerance, 34 
Introspection, 283, 312 
Ireland, linguistic problems of, 

230 ff. 
Irrationality, 184, 267 
Italy, 149 

Jevons, William Stanley, 124 
Justice, 51 ff., 345 f. 

Kallen, Horace M., 47, 249 
Kant, Immanuel, 62, 165, 352 

Land ownership, 353 ff. 
Laplace, Pierre Simon, 79 
Lassalle, Ferdinand, 116 n., 149, 

Law, natural, 44 ff . 
Lenin, Nikolay, 133, 328, 331 
Likelihood, 314 
Linguistic changes, 227 ff. 

Majorities, 65 ff., 132 
Mandeville, Bernard de, 144. 

166 ff. 
Mannheim, Karl, 249 n. 
Marx, Karl, 64, 121, 157 ff., 170, 

175 ff., 377, 379; on the policy 

of the labor unions, 137 
Marxism, 26, 51, 102 ff., 329 f.; 

and equal distribution of land 


ownership, 359; and foreordi- 
nation, 80 

Mass phenomena, 259 ff. 

Materialism, 2, 75 f., 94 ff.; ethi- 
cal, 57 f., 94, 150, 368; meta- 
phors of, 94 ff. 

Materialist interpretation of his- 
tory, 150 ff. 

May, Geoffrey, 299 

Means and ends, 12 f., 280 

Meliorism, 172, 221 

Menger, Carl, 124, 377 

Mercantilism, 30, 297 

Metaphysics, 4 

Middle Ages, alleged ethical con- 
formity of the, 42 ff. 

Militarism, 351 

Mill, John Stuart, 67, 206 f., 348, 

Miller, Alexander, 154 f . 

Minorities, 67 f . 

Miracles, 7 

Mohammed, 79, 379 

Montaigne, Michel de, 30 

Myrdal, Gunnar, 205 ff. 

Nationalism, aggressive, 296 ff. 
Nationality, principle of, 231 
Natural sciences, 90 f. 
Neo-indeterminisrn, 88 f. 
Neumann, John von, 86 
Neurath, Otto, 243 
New Deal, 144, 146 
Nietzsche, Friedrich, 215, 222 

Panphysicalism, 93, 243 ff. 
Perfection, state of, 362 ff. 
Periodalism, 201 f . 
Philosophy of history, 162 ff., 323 
Pius IX, Pope, 68 
Poincare, Henri, 74 n. 
Polylogism, 31 f., 123 
"Popular Front," 350 
Population, optimum size of, 41, 

Positivism, 93, 241, 285; legal, 

47 f. 
Praxeology, 271 
Prediction, 4 f ., 274, 303 ff . 


"Present" economic conditions, 

Privileges, 32 f., 237 

Probability, 91, 314 

Profits, 209 f., 366 

Progress, 162, 167, 172, 174, 
214 f., 295 f„ 367 ff.; economic, 
370; technological, 358 f. 

Proletariat, 115 

Property, private, 329 

Proudhon, Pierre Joseph, 111 

Prussia, 149 

Psychoanalysis, 152 ff., 266 ff. 

Psychology, 264 ff. 

Punishment, justification of, 83 f. 

Quantum mechanics, 87 
Quetelet, Adolphe, 84 

Race, 160 f. 

Racism, 41, 332 ff. 

Rationalism, 269 

Rationality, 183 f., 267 

Rationalization, 280 ff. 

Rau, Karl Heinrich, 377 

Regularity, 5 ff. 

Relativism, 215 

Renaissance, 295 

Revelation, 49 f . 

Revolution, 115 

Ricardo, David, 29, 125, 235 

Rickert, Heinrich, 308 

Robertson, John Mackinnon, 86 

Rougier, Louis, 46 n. 

Rousseau, Jean Jacques, 173, 329 

Russell, Bertrand, 91 f. 

Russia, 149 

Santayana, George, 275 n. 

Schopenhauer, Arthur, 377 

Science, "Unified," 3, 243 

Sciences, social, 256 ff. 

Secularism, 337 ff. 

Selection, natural, 213 

Smith, Adam, 125, 144, 167 ff., 

Socialist ideas, "bourgeois" ori- 
gin of, 121 f . 

Society, 251 f . 



Sociology, 241 f., 285 
Sombart, Werner, 238 f. 
Sozialpolitik, German, 144 
Spengler, Oswald, 222 ff. 
Spiethoff, Arthur, 200 n. 
Stage doctrines, 169 f. 
Stalin, Joseph, 331 
Statistics, 84 ff., 89, 260 
Status society, 113 ff., 328, 352 
Stein, Lorenz von, 143 
Stephen, Leslie, 209 
Strauss, Leo, 299 f . 
Styles of economic activity, 204 

Tarde, Gabriel, 261 
Tawney, R. H., 238 
Thermodynamics, 211 ff. 
Thymology, 264 ff., 312 ff. 
Tocqueville, Alexis de, 67 
Toynbee, Arnold J., 222 ff. 
Trends, 204, 330, 350, 367 ff. 
Types, ideal, 191, 315; real, 316; 
"ought," 317 

Understanding, specific, of the 
historical sciences, 191, 264 f., 
310 ff. 

Utilitarianism, 12 n., 49 ff., 55 ff., 

Utopian writings, 196 f . 

Valuational neutrality (Wertfrei- 

hett), 26, 271, 298 ff. 
Value, judgments of, 19 ff. 
Values, absolute, 35 ff.; aesthetic, 

61 f. 
Variables, 10 ff. 
Vico, Giovanni Battista, 222 
Volksgeist, 190, 242 

Wages, Iron Law of, 116 f. 

Wagner, Richard, 57 

Watson, John B., 246 f. 

Weber, Max, 308 

Wilson, President Woodrow, 

378 f. 
Windelband, Wilhelm, 308 

Zola, fimile, 278 f .